An Empirical Analysis of Migratory Flows to the United States

Abstract

The decision by economic migrants to leave their country of origin for the purpose of employment and to improve quality of life is generally regarded as an investment decision. Real or expected income differentials between the source and the host country and the possibilities of being employed in each influence the decision to migrate. Economic migrants also respond to non-pecuniary factors, such as climate, environmental amenities, and life cycle variables. This paper examines how labor market regulations may influence work migration to the United States. The hypothesis is that the negative effects of excessive labor market regulations on income reported by Fullerton et al. (2007) and Licerio et al. (2010) will increase migration to countries with more flexible and less restrictive regulatory labor markets. Data from the Doing Business 2010 report describing labor market conditions in several countries and territories during 2010 are employed to describe labor market restrictiveness in 168 countries. Four models are specified to measure the effects of labor market restrictiveness on migration. Deviance Information Criterion (DIC) estimates are utilized to select the best specification for modeling migration to the United States. Empirical results confirm many of the hypotheses, but some of the outcomes are relatively weak.