Journal of Labor Economics Vol. 21 No. 2 2003

Migration, Family, and Risk Diversification

Kong-Pin Chen^1,2; Shin‐Hwan Chiang³; Siu Fai Leung⁴

¹ National Taiwan University · ² Academia Sinica · ³ York University · ⁴ Hong Kong University of Science and Technology

Abstract

This article proposes a formal model of migration in which workers are heterogeneous and markets are stochastically correlated. We derive and characterize the optimal migration pattern of a family. We show that migration can take place even when migrants earn less abroad and, surprisingly, when earnings in the foreign country are riskier for every member of the family. Moreover, it may well be an optimal arrangement to have only dependents migrate, thus rationalizing the recent dependent‐oriented migration flows from places like Hong Kong and Taiwan. We provide some evidence in support of our theory.

DOI

10.1086/345561

Volume

21

Issue

2

Pages

353-380

Language

en

Sources

openalex crossref

Cite

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