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Empirical Economics
Published in: Empirical Economics 4/2022

10-01-2022

Is there a patience premium on migration?

Author: Jorge González Chapela

Published in: Empirical Economics | Issue 4/2022

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Abstract

The very few studies on the empirical link between time preference and migration involve small samples or do not control for cognitive skills. This study uses data from a large, nationally representative survey with information on time preferences and cognitive skills to investigate whether cross-region migrants in Spain are less impatient than individuals who choose to remain in their birth region. The empirical model incorporates predicted probabilities of misclassifying lifetime migrant status. The results suggest that the effect of impatience on the likelihood of migrating internally is negative but decreasing, and that it is smaller than the effect on the likelihood of migrating abroad.
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Footnotes
1
The samples analyzed by Nowotny (2014) are large, but the migration information refers to migration willingness. The samples analyzed by Gibson and McKenzie (2011) consist entirely of highly skilled individuals.
 
2
A complete description of the ECF and its methods is provided in Bover et al. (2019).
 
3
For natives the ECF asks for the province of birth, but only the birth region is disclosed.
 
4
Individuals born in Ceuta or Melilla are excluded because their birth place perfectly predicts successes/failures in the models of classification errors estimated below.
 
5
The statutory minimum working age in Spain was set at 14 years in 1944 (although younger children were permitted to work in agriculture and family shops), and was raised to 16 in March 1980.
 
6
Ramalho (2002) develops an estimator for misclassified choice-based samples assuming misclassification probabilities independent from individual characteristics. This assumption does not hold in this study.
 
7
When a respondent is indifferent between €d1 today and €d2 in a year’s time, the RRR needed to induce her/him to forgo d1 Euros immediately is \(2\left( {\left( {{{d_{2} } \mathord{\left/ {\vphantom {{d_{2} } {d_{1} }}} \right. \kern-\nulldelimiterspace} {d_{1} }}} \right)^{{{1 \mathord{\left/ {\vphantom {1 2}} \right. \kern-\nulldelimiterspace} 2}}} - 1} \right)\). This definition assumes semiannual compounding of the annual interest rate as a natural compromise between the types of compounding that Spaniards are most familiar with (monthly/quarterly compounding on typical bank accounts, and annual reports on the rate of return from savings accounts, pension funds, or stock holdings).
 
8
“Imagine you were to win (e.g. in the Christmas lottery) an amount of money equivalent to your household’s monthly income. What percentage would you spend during the following 12 months, rather than saving it or using it to repay outstanding debts?”.
 
9
See Train (2009) for a good treatment of numerical maximization.
 
10
Except for the coefficient on the intercept included in \(x\), which is the linear probability estimate of the coefficient on \(\left( {1 - \alpha_{0i} - \alpha_{1i} } \right)\) in (10) minus 0.5 multiplied by 2.5 (Amemiya 1981).
 
11
Estimating (8) with an interaction between birth region and single-year birth cohort reveals that the propensity to migrate non-autonomously grew in some regions during the Spanish Civil War and/or the “rural exodus”, and that it is roughly constant for the younger cohorts. Placing knots at 10-year intervals oversmooths the effect of the Civil War. Fitting region-specific fifth order polynomials yields predictions for 1994–1998 that look inconsistent with reality.
 
12
Estimating (9) with indicators for single-year age group interacted with birth region reveals cross-region convergence in the propensity to return up to the late 20 s, followed by divergence from the late 30 s onwards.
 
13
The lack of controls for marital status and the spouse’s time preference at the time when the migration decision was taken may be inconsequential: Results in Leigh (1986) suggest that time preference and being married are unrelated, and the evidence in Gnagey et al. (2020) points to positive assortative mating on time preferences.
 
14
AMEs are obtained by averaging marginal effects across observations, with standard errors calculated using the delta method. For categorical variables represented by sets of indicators, AMEs are calculated by zeroing out all the indicators in the set and setting the corresponding indicator to unity for all observations.
 
15
In a consume-on-receipt model with no background consumption, the less risk-averse the individual is, the lower RRR is (Cohen et al. 2020).
 
16
Arezzo and Guagnano (2019) develop an estimator for misclassified binary choice models with sample selection assuming misclassification probabilities independent of individual characteristics.
 
17
Household income is recorded in six categories. About 10 percent of respondents provide no data for this variable. For each missing value, the ECF provides five imputed values. Following Little and Rubin (2002), we conduct multiple imputation estimations.
 
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Metadata
Title
Is there a patience premium on migration?
Author
Jorge González Chapela
Publication date
10-01-2022
Publisher
Springer Berlin Heidelberg
Published in
Empirical Economics / Issue 4/2022
Print ISSN: 0377-7332
Electronic ISSN: 1435-8921
DOI
https://doi.org/10.1007/s00181-021-02196-z

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