Affluent Lives Beyond the Border? Individual Wage Change Through Migration

Abstract

AbstractThis chapter investigates individual wage changes of German emigrants. The analytical strategy is twofold. First, we compare hourly wage changes among emigrants with wage changes among stayers. We estimate the Difference-in-Difference of mean net hourly wages between stayers and emigrants over time and account for the positive selection of emigrants on observable characteristics through entropy balancing. Second, we explore the heterogeneity of wage changes among emigrants. To that end, we calculate linear regressions on the log net hourly wage change through migration. The first analysis suggests substantial wage increases of 8 euros through migration. The second analysis provides evidence that characteristics of employment and of destination countries account for differences in the wage change among emigrants. Among individual characteristics, only age is negatively correlated, while education and gender do not account for differences. Our analysis rely on the first wave of the German Emigration and Remigration Panel Study. The German Socio-Economic Panel Study yields our reference population of stayers.