Does Migration Increase Wage Rates?

An Analysis of Alternative Techniques for Measuring Wage Gains to Migration

by Julie DaVanzo, James Hosek

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To estimate the wage gains to migration, migrants' post-migration wages should be compared with what the migrants would have earned had they not moved (their "counterfactual" wages), and not with the wages of apparently similar nonmigrants. This Note uses a "regression switching" model that enables one to make the appropriate comparison. Data from the Panel Study of Income Dynamics are used to compare the results of the regression switching model with those derived from the usual migrant/nonmigrant comparison. The Note examines two alternative dependent variables for measuring the wage gains to migration: the wage rate at the end of the migration interval, and the difference between wage rates before and after the migration interval.

This report is part of the RAND Corporation note series. The note was a product of the RAND Corporation from 1979 to 1993 that reported other outputs of sponsored research for general distribution.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.