2007年-世界发展银行全球_A_Land_of_Milk_and_Honey_with_Streets_Paved_with_Gold___Do_Emigrants_Have_Over-Optimistic_Expectations_about_Incomes_Abroad__34页_399kb

Summary of the Paper: "A Land of Milk and Honey with Streets Paved with Gold: Do Emigrants Have Over-Optimistic Expectations About Incomes Abroad?"

Core Content

This paper investigates whether potential emigrants have over-optimistic expectations about the incomes they can earn abroad, using a unique survey and a natural experiment in the context of Tongan migration to New Zealand. The authors analyze the accuracy of these expectations by comparing them with the actual earnings of those who successfully emigrated through the Pacific Access Category (PAC) lottery system.

Main Findings

• Underestimation of Earnings and Employment Chances: The study finds that potential emigrants significantly underestimate both their chances of being employed and their expected earnings in New Zealand. Ballot losers in Tonga, who did not win the PAC lottery, express a mean percent chance of employment of 57.2%, while the actual employment rate among ballot winners is 75.4%.

• Income Expectations: The mean and median expected weekly earnings of ballot losers are $337 and $303, respectively, compared to $564 and $515 for actual earnings. This indicates a 40% underestimation of income expectations across the entire distribution.

• Unconditional Earnings: When combining the probability of employment with conditional earnings, the mean expected unconditional weekly earnings are $196, which is only 46% of the actual mean earnings of $423.

• Gender Differences: Males tend to underestimate earnings more than females. While both genders have similar earnings in Tonga, the male earnings premium in New Zealand is not well understood by potential emigrants in Tonga.

• Family Influence: Individuals with extended family in New Zealand tend to underestimate their potential earnings more than those without such family connections, possibly due to understatement of income by returning migrants to reduce remittance pressure from family members.

• Expectations Predict Migration Decisions: The study shows that higher expected income is associated with a higher likelihood of applying for migration. A $100 increase in expected income is linked to a 10 percentage point increase in the probability of applying.

Key Information

• Survey Methodology: The paper uses data from the Pacific Island-New Zealand Migration Survey (PINZMS), which includes three sub-samples: PAC ballot winners (who emigrated), ballot losers (who remained in Tonga), and non-applicants.

• Natural Experiment: The PAC lottery provides a randomized selection process, allowing for an unbiased comparison between emigrants and non-emigrants.

• Expectation Elicitation: The authors use probabilistic questions to measure expectations, which are more accurate than traditional qualitative questions. These questions help estimate the full subjective distribution of earnings, including moments and quantiles.

• Log-Normal Distribution Fit: The subjective earnings distribution is modeled using a log-normal distribution, which fits the elicited data closely. The mean absolute difference between the elicited and fitted distributions is 0.017, with 73 out of 77 observations having errors below 0.05.

• Income Distribution Comparison: The expected income distributions are consistently shifted to the left relative to the actual distributions, indicating a general understatement of earnings. Even at the 90th percentile, expected earnings are 73% of actual earnings.

• Policy Implications: The study suggests that more accurate information about earnings abroad could help reduce unrealistic migration pressures. It also highlights the role of social and family influences in shaping expectations, which may lead to overestimation of remittance needs and underestimation of earnings.

Structure of the Paper

1. Abstract: Introduces the research question and highlights the importance of accurate income expectations for migration policy.
2. Survey and Experimental Design: Describes the PINZMS survey and the PAC natural experiment.
3. Measuring Expectations: Explains the use of probabilistic questions and the fitting of subjective earnings distributions.
4. Expectations about Employment: Analyzes the percent chance of employment and finds significant underestimation.
5. Expectations about Income: Compares expected and actual weekly earnings and shows consistent underestimation.
6. Unconditional Earnings: Combines employment probability with earnings expectations to assess overall income forecasts.
7. Do Expectations Predict Migration Decisions?: Demonstrates that income expectations influence the decision to migrate.
8. Explanations for Underestimation: Discusses the role of family influence, psychological biases, and information asymmetry in shaping inaccurate expectations.

Conclusion

The paper concludes that potential emigrants, particularly in Tonga, have systematic underestimations of both employment chances and income levels in New Zealand. These inaccuracies are influenced by social dynamics, family communication, and psychological biases. The findings have important implications for migration policy, suggesting that better information dissemination could help reduce unrealistic migration expectations and the associated social and economic challenges.