Nova SBE – Universidade Nova de Lisboa, CReAM, IZA and NOVAFRICA
Central Bank of Ireland
Pedro C. Vicente
Nova SBE – Universidade Nova de Lisboa, BREAD, CSAE – University of Oxford and NOVAFRICA
Working Paper No 1401
Revised December 2016
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.
This paper is forthcoming in the Oxford Bulletin of Economics and Statistics. You can find the published version of the paper here.