Aspirations of Migrants and Returns to Human Capital Investment

Abstract

Migrants are believed to have higher aspirations than non-migrants. Furthermore, studies find that migration itself leads to even higher aspirations. One conventional explanation found in the literature is that migrants adapt their aspirations to their income relative to that of a new reference group. As this process continues migrants are miserably trapped on a hedonic treadmill. Alternatively, migration can be viewed as an investment in capabilities that can expand the aspirational window through the awareness of even better opportunities that lead to higher aspirations. If cities are viewed as places where migrants can accumulate human capital, the increase in aspirations after migration may be explained from an angle of expected returns to the human capital investment. Using two waves of Indonesian Family Life Survey (2000, 2007), this study presents tests of these two possible explanations about the change in aspirations after migration. To this end, this study uses a variable constructed by a difference between a migrant’s current level of subjective well-being and her future aspired level of well-being. The results cast doubt on the view that post-migration aspirations make migrants miserable in their migration destinations. Instead, this study finds ample evidence to support the view that migrants move to urban areas in order to accumulate human capital, looking forward to returns to their investment.