Abstract
While conventional human capital models regard differential lifetime net earnings as the key motivation for emigration, we incorporate the interaction of economic and political factors into the emigration decision. Empirically we allow economic and political confidence to interact in a discrete choice model and test it with data from Hong Kong during its transition from British rule to a new regime under China. Our results show that the lack of political confidence increases the emigration propensity significantly. The lack of economic confidence increases it to a lesser extent, whereas the expected decrease in income after migration deters emigration only marginally. J. Comp. Econ., September 2002, 30(3), pp. 488–504. Hong Kong Baptist University, Renfew Road, Kowloon Tong, Hong Kong. © 2002 Association for Comparative Economic Studies. Published by Elsevier Science (USA). All rights reserved. Journal of Economic Literature Classification Numbers: J31, J61, O15.
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