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Return Migration, Self-Selection and Entrepreneurship

NOVAFRICA working paper series
Cátia Batista

Nova SBE – Universidade Nova de Lisboa, CReAM, IZA and NOVAFRICA

Tara McIndoe-Calder

Central Bank of Ireland

Pedro C. Vicente

Nova SBE – Universidade Nova de Lisboa, BREAD, CSAE – University of Oxford and NOVAFRICA

ISSN 2183-0843
Working Paper No 1401
May 2014
Revised December 2016

Abstract

Are return migrants more entrepreneurial? Existing literature has not addressed how estimating the impact of return migration on entrepreneurship is affected by double unobservable migrant self-selection, both at the initial outward migration and at the final inward return migration stages. This paper exploits exogenous variation provided by the civil war and the incidence of agricultural plagues in Mozambique, as well as social unrest and other shocks in migrant destination countries. The results lend support to overall negative unobservable return migrant self-selection, which results in an under-estimation of the effects of return migration on entrepreneurial outcomes when using a ‘naïve’ estimator that does not control for self-selection at both the initial migration and at the final return migration stages.

Download the Paper (PDF)

This paper is forthcoming in the Oxford Bulletin of Economics and Statistics. You can find the published version of the paper here.