The search goes on: Parameter effects on the return migration decision

Abstract

In this paper we present an experiment designed to test some of the predictions of the Harris-Todaro model of migration. In particular, we examine determinants of an individual's return migration decisions. Data issues in the developing world and with migration data in general limit empirical testing of the model. In such a data environ-ment, laboratory experiments can add insight to the theory. We introduce an external opportunity to a traditional labour market search experiment to examine whether it extends search and unemployment in a primary market. Our results generally support the predictions of the model. The experiments predict that the possibility of return, the cost of return, and the existence of trophy wage opportunities in the urban market all reduce the likelihood of return migration.