Income rank and income concerns: What correlates with international migration intentions?

Abstract

The link between the relative income theory and migration is well-established. There is however less consensus on how migration intentions change as populations climb up the wealth ladder. We argue that people’s subjective concerns about unfavorable financial positions and the worry about deteriorating income rank are associated with higher migration intentions, irrespective of actual income gaps. Drawing on survey data from the Gallup World Poll (GWP), spanning 129 countries between 2009 and 2017, this is the first cross-country study that attempts to gauge the links between the concerns about low rank in relative deprivation and international migration. We construct an index to proxy the intensity of the concern over low income using individuals’ self-assessment of own financial and life wellbeing. Our findings have important migration policy implications for home countries. While improving macroeconomic conditions and reducing actual inequality are important to lower migration outflows, migration intentions can be more significantly associated with subjective perceptions of lower financial well-being than with actual income or wealth differentials. The results held robust in both individual and pseudo panel results, across genders and educational levels, and after controlling for relative macroeconomic conditions, global communication, and addressing endogeneity.