Who Leaves and Who Returns?Deciphering Immigrant Self-Selectionfrom a Developing Country

Existing research examining the self-selection of immigrants suffers from a lack ofinformation on the immigrants´ labor force activities in the home country, quotas limiting whois allowed to enter the destination country, and non-economic factors such as internal civilstrife in the home country. Using a novel data set from the Federated States of Micronesia(FSM), I analyze a migration flow to the U.S. that suffers from none of these problems. I findthat high-skilled workers (relative to the home country skill distribution) are the most likely tomigrate from the FSM to the U.S. and that their behavior is explained mainly by the differencein average wages for their skill group. This finding suggests that previous immigration studieshave overemphasized the role played by differences in the distributions of countries´ wagesand skills...