Accounting for selectivity and duration-dependent heterogeneity when estimating the impact of emigration on incomes and poverty in sending areas
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The impacts of international emigration and remittances on incomes and poverty in sending areas are increasingly studied with household survey data. Empirical analysis is needed because the effect of emigration is a priori unclear. Households with emigrants typically benefit from remittance inflows. The biggest difficulty in estimating the impacts of emigration is posed by selectivity issues. A common research strategy in this literature is to use household survey data from the sending country to compare households where some members have emigrated to those where no one has emigrated. The SQ policy rules control who can accompany the principal migrant, enabling us to address the second selectivity problem. Finally, the survey includes a module on return migration, allowing us to address the third selectivity problem. International migration is most prevalent and has the largest effects in small island countries, so this paper provides new evidence of the impact of migration in a country setting where it is of first-order importance.