THE PROBABILITY OF RETURN MIGRATION, MIGRANTS WORK EFFORT, AND MIGRANTS PERFORMANCE

This paper demonstrates that differences in earnings between migrants and the native population may reflect differences in incentives rather than differences in characteristics. The analysis indicates that in the presence of a positive probability of return migration, migrants' work effort is higher than that of comparable native-born workers. This differential may explain why, even if all workers are perfectly homogeneous in skills, migrants often outperform the native-born workers in the receiving economy. © 1991.