1. How Borrowing Constraints Hinder Migration: Theoretical Insights from a Random Utility Maximization Model
- Author
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Léa Marchal, Claire Naiditch, Lille économie management - UMR 9221 (LEM), Université d'Artois (UA)-Université catholique de Lille (UCL)-Université de Lille-Centre National de la Recherche Scientifique (CNRS), Economie Quantitative, Intégration, Politiques Publiques et Econométrie (EQUIPPE), Université de Lille, Droit et Santé-PRES Université Lille Nord de France-Université de Lille, Sciences Humaines et Sociales-Université de Lille, Sciences et Technologies, and Université de Lille, Sciences et Technologies-Université de Lille, Sciences Humaines et Sociales-PRES Université Lille Nord de France-Université de Lille, Droit et Santé
- Subjects
Estimation ,Economics and Econometrics ,Discrete choice ,JEL: F - International Economics/F.F2 - International Factor Movements and International Business/F.F2.F22 - International Migration ,financial constraint ,05 social sciences ,Utility maximization ,multilateral resistance to ,JEL: O - Economic Development, Innovation, Technological Change, and Growth/O.O1 - Economic Development/O.O1.O15 - Human Resources • Human Development • Income Distribution • Migration ,migration ,[SHS.ECO]Humanities and Social Sciences/Economics and Finance ,JEL: J - Labor and Demographic Economics/J.J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers/J.J6.J61 - Geographic Labor Mobility • Immigrant Workers ,[SHS]Humanities and Social Sciences ,JEL: C - Mathematical and Quantitative Methods/C.C6 - Mathematical Methods • Programming Models • Mathematical and Simulation Modeling/C.C6.C63 - Computational Techniques • Simulation Modeling ,Discrete choice model ,0502 economics and business ,8. Economic growth ,Economics ,Econometrics ,050207 economics ,050205 econometrics - Abstract
International audience; We provide a theoretical framework to analyze how financial constraints hinder migration. Introducing wealth heterogeneity and borrowing constraints into a random utility maximization model of migration, we find evidence of multilateral resistance to migration stemming from borrowing constraints. We calibrate the model on 22 European countries, and we show that omitting the constraints biases upward the estimation of bilateral migration rates. We then simulate an increase in the bilateral cost of migration to the United Kingdom. We find that omitting the constraints biases downward the change entailed by the cost increase in the bilateral rates of migration to all destinations.
- Published
- 2019