Internal migration, earnings, and the importance of self-selection.
This paper analyzes the impact of internal migration on earnings within the human capital model framework.  Since migrants constitute a non-random sample of population, the endogenous nature of migration decision warrants necessary correction for the selectivity bias in their earnings function.  The Mincer-type earnings model is thus augmented to determine the extent of this bias.  Besides estimating the standard Mincerian earnings model, the paper also attempts to verify the learn-as-you-go proposition by introducing migration duration variables in the earnings model.  Based on the household level Population, Labor Force, and Migration (1979-80) survey data, the analysis yields the following important conclusions: (i) the data allowed a meaningful estimation of Mincerian earnings function for migrants and non-migrants; (ii) the level of schooling was one of the important determinants of the distribution of income both for migrants and nonmigrants--the four categorical variables of education were in general statistically significant with expected signs, implying that the hypothesis of a positive relationship between income and education was accepted; (iii) the rates of return to education improved systematically with higher levels of education, thus confirming the notion that education serves as a signalling device; (iv) the age-income profile was almost linear for migrants but showed concavity for nonmigrants; (v) the presence of sample-selection was observed for migrants; and (vi) even after controlling for the influence of personal characteristics, i.e., education and experience, the long-standing migrants earned relatively more at the destination than the more recent migrants.
D000367:Age Factors; D001208:Asia; D001519:Behavior; D003657:Decision Making; D003710:Demography; D003906:Developing Countries; D004467:Economics; D004522:Educational Status; D004641:Emigration and Immigration; D006280:Health Workforce; D007182:Income; D008962:Models, Theoretical; D010154:Pakistan; D011153:Population; D011154:Population Characteristics; D011157:Population Dynamics; D012106:Research; D012923:Social Class; D012959:Socioeconomic Factors; D014171:Transients and Migrants
Age Factors; Asia; Behavior; Decision Making; Demographic Factors; Developing Countries; Economic Factors; Educational Status; Human Capital; Human Resources; Income; Migrants; Migration; Migration, Internal; Models, Theoretical; Pakistan; Population; Population Characteristics; Population Dynamics; Research Methodology; Socioeconomic Factors; Socioeconomic Status; Southern Asia