In this study the authors estimate the impact of the income earned in the host country on return migration of labour migrants from developing countries. They use a three-state correlated competing risks model to account for the strong dependence of labour market status and the income earned. Their analysis is based on administrative panel data of recent labour immigrants from developing countries to The Netherlands. The empirical results show that intensities of return migration are U-shaped with respect to migrants’ income, implying a higher intensity in low- and high- income groups. Indeed, the lowest-income group has the highest probability of return. They also find that ignoring the interdependence of labour market status and the income earned leads to an overestimating of the income effect on departure.
Bijwaard, G.E.; Wahba, J. Do high-income or low-income immigrants leave faster? Journal of Development Economics (2014) 108: 54-68. [DOI: 10.1016/j.jdeveco.2014.01.006]