Individual Preferences and Self-Selection into Emigration in Developing Countries

Individuals decide about migration by comparing perceived costs and benefits associated with it. Individual characteristics – such as age, education, social bonds, time preferences or risk attitudes – drive actual costs and benefits as well as their perception. Thus, self-selection into migration significantly depends on individual preferences. Despite the centrality of self-selection to the migration literature and the emerging evidence on the importance of preferences for development, a lack of data has previously left the role of individual preferences in shaping migration decisions almost completely unstudied. We provide the first systematic analysis of how several individual preferences shape migration decisions. Using individual-level data from 47 low and middle income countries from the Gallup World Poll and the Global Preference Survey, we find that besides risk attitudes, patience and negative reciprocity are particularly important. Moreover, expecting positive economic development, trust in the government, and low corruption encourage people to stay. Better economic outlooks particularly affect those who are impatient. Corruption by contrast drives out those who would otherwise be too risk averse to consider leaving the country. Creating economic opportunities and improving governance can thus not only be effective in reducing the total number of people who leave, it also affects the mix of emigrants, which can have important implications for development by determining the distribution of preferences among those who remain. Our paper thus provides the first quantitative study of patterns underlying a previously overlooked preference-based brain drain.