The Wage Premium of Migrants and Returned Migrants: Evidence from Internal Migration in Brazil
Department of Agricultural & Applied Economics
University of Wisconsin - Madison
Thursday, November 2, 2017
Taylor-Hibbard Seminar Room (Rm103)
3:45 pm-5:00 pm
This paper looks at the of labor earnings of internal migrants in Brazil from 2004 to 2014 to better understand the composition and the evolution of the wage premium of migrants and returned migrants. Corroborating stylized facts in the literature, we find that the hourly labor earnings of migrants are about 10% higher than that of non-migrants in Brazil. For returned migrants, the difference is approximately 4%. Moreover, while the wage premium of migrants has remained virtually constant over the period analyzed, the premium of returned migrants has increased significantly and continuously. We employ different OLS regressions to analyze this evolution using residence fixed effects to control for the place premium and different specifications to investigate the role of self-selection, learning, and the likelihood of unemployment on this differential. Additionally, we use historical rates of internal migration to proxy for migrant networks and thus get an instrument that allows us to look at differences in earnings beyond the simple correlations provided by OLS.