Intentions to Return of Clandestine Migrants: Comment

• Date: 01 February 2013
• Author: Oded Stark,Lukasz Byra
• Published date: 01 February 2013
• DOI: http://doi.org/10.1111/rode.12023

Intentions to Return of Clandestine Migrants:

Comment

Oded Stark and Lukasz Byra*

Abstract

We take issue with the reasoning of Coniglio et al. (2009) that whereas better-skilled illegal migrants will

prefer to return-migrate, lower-skilled illegal migrants will not. We argue that under asymmetric

information, all the illegal migrants are initially paid a wage based on the average productivity of the group

of illegal migrants.The better-skilled illegal migrants thus face two “taxes:” being paid less than if they were

legal, and being averaged down.Therefore, better-skilled illegal migrants can be expected to expend more

effort to become legal than lower-skilled illegal migrants.And once legalized, there is no reason for the

better-skilled illegal migrants to want to return to their country of origin more than the lower-skilled illegal

migrants.Thus, it is the lower-skilled illegal migrants that are likely to dominate the return migration flow.

We argue that in other respects too, the model of Coniglio et al. is not based on reasonable assumptions,

and that even under the postulated assumptions, the model suffers from several inconsistencies. In

particular, when the rate of return to savings is an increasing function of skill level, we would expect there

to be few better-skilled individuals among illegal migrants in the first place. Also, an obvious distinction

between savers and borrowers is ignored.

1. Introduction

In a recent issue of this Review, Coniglio et al. (2009) sought to explain why

better-skilled illegal migrants will find it optimal to return to their country of origin,

whereas lower-skilled illegal migrants will not. Employing a simple two-period

life-cycle framework with individuals who are heterogeneous with respect to their

skill level, and where illegality causes “skill waste” by reducing a migrant’s rate of

return to skill (a form of taxation on earnings), an illegal migrant faces the following

decision at the end of the first period of his life: to stay put and face a fixed positive

probability of legalization, or to return home. As modeled, the outcome of this

decision hinges crucially on a presumption that not only the individuals’ earnings, but

also the rate of return to the savings that the individuals accumulate during the first

period of their life depend positively on skill level. These savings cannot be put to full

use in the host country because of the migrant’s illegal status, and thus are “taxed” in

a similar way to the migrants’ earnings. Coniglio et al. maintain that better-skilled

illegal migrants find it optimal to return to their home country, where they can use

their savings to undertake an entrepreneurial activity, which in turn provides them

with a higher rate of return to their savings than they would have received had

they remained in the host country. The model appears to constitute an attempt

* Stark (corresponding author): Universities of Bonn, Klagenfurt, and Vienna; Warsaw University;

Warsaw School of Economics. Address for correspondence: Oded Stark, ZEF, University of Bonn,

Walter-Flex-Strasse 3, D-53113 Bonn, Germany. E-mail: ostark@uni-bonn.de. Byra: Faculty of Economic

Sciences, Warsaw University, Dluga Street 44/50, 00-241 Warsaw, Poland. E-mail: lbyra@wne.uw.edu.pl.The

support of Georgetown University Edmund A. Walsh School of Foreign Service in Qatar is gratefully

acknowledged.

Review of Development Economics, 17(1), 156–162, 2013

DOI:10.1111/rode.12023

© 2013 Blackwell Publishing Ltd