Altruism and migration: Evidence from Korea and the United States

Economic Development and Cultural Change

Volumn 44, Issue 4, 1996, Pages 858-878

  Tcha, Moonjoong ^a  

^a UNIVERSITY OF WESTERN AUSTRALIA   (Australia)

Author keywords

[No Author keywords available]

Indexed keywords

ALTRUISM; DEVELOPING COUNTRY; HOUSEHOLD INCOME; INCOME; INTERGENERATIONAL ANALYSIS; MIGRATION DETERMINANT; MIGRATION DETERMINANTS;

KOREA(SOUTH);

EID: 0030467421     PISSN: 00130079     EISSN: None     Source Type: Journal    
DOI: 10.1086/452248     Document Type: Article

References (25)

1. See L. Sjaastad, "The Costs and Returns of Human Migration," Journal of Political Economy 70 (1962): 80-93; and M. Todaro, "A Model of Labor Migration and Urban Unemployment," American Economic Review 69 (1969): 183-93.
2. See L. Sjaastad, "The Costs and Returns of Human Migration," Journal of Political Economy 70 (1962): 80-93; and M. Todaro, "A Model of Labor Migration and Urban Unemployment," American Economic Review 69 (1969): 183-93.
3. J. Mincer, "Family Migration Decisions," Journal of Political Economy 86 (1978): 749-73.
4. G. Borjas, "The Intergenerational Mobility of Immigrants" (University of Chicago, Department of Economics, 1990, mimeographed).
5. R. Barro and G. Becker, "Fertility Choice in a Model of Economic Growth" (University of Chicago, Department of Economics, 1986, mimeographed).
6. Sections II and III are a brief summary of an earlier paper (M. Tcha, "Altruism, Conflicts and the Migration Decision," Discussion Paper no. 93-04 [University of Western Australia, Department of Economics, 1993]). This summary is required to derive the dynastic utility of the migration decision maker, which will be used for the subsequent empirical tests. For a more detailed analysis of the family migration decision and conflict between family members, see Tcha.
7. Barro and Becker, "Fertility Choice in a Model of Economic Growth"; see also R. Barro and G. Becker, "A Reformulation of the Economic Theory of Fertility" (University of Chicago, Department of Economics, 1987, mimeographed).
8. Barro and Becker, "Fertility Choice in a Model of Economic Growth"; see also R. Barro and G. Becker, "A Reformulation of the Economic Theory of Fertility" (University of Chicago, Department of Economics, 1987, mimeographed).
9. Barro and Becker, "Fertility Choice in a Model of Economic Growth" and "A Reformulation of the Economic Theory of Fertility."
10. See, e.g., J. Altonji, F. Hayashi, and L. Kotlikoff, "Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data," American Economic Review 82 (1992): 1177-1198; and S. Chakrabati, W. Lord, and P. Rangazas, "Uncertain Altruism and Investment in Children," American Economic Review 83 (1993): 994-1002.
11. See, e.g., J. Altonji, F. Hayashi, and L. Kotlikoff, "Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data," American Economic Review 82 (1992): 1177-1198; and S. Chakrabati, W. Lord, and P. Rangazas, "Uncertain Altruism and Investment in Children," American Economic Review 83 (1993): 994-1002.
12. A possible alternative for the parent would be to stay on the farm and send the child to the urban area for a higher education or job training. The model considering this alternative is analyzed in M. Tcha, Altruism and Migration - Korea and the U.S. (Ph.D. thesis, University of Chicago, 1992).
13. This assumption focuses on the ex ante hope of the migrating parent. It is not unreasonable to assume that the parent expects the child to be successful. In 1983, a Korean migration survey (Economic Planning Board, Migration Survey [Seoul: Economic Planning Board, 1983]) showed that more than 90% of migrants expected their children to achieve an education higher than junior college level. In 1983, the number of schools higher than junior college level in Korea was 234, and 220 of such schools were located in urban areas. In recent years, it appears that school quality is higher in suburban areas than in urban areas. However, the migrants I analyzed in this article come from rural areas, not the suburbs. The degree of altruism decides the weight of incomes in dynastic income used in the regression analysis. That effect is explained in detail in sections III and IV.B.3.
14. The value π represents the difference of the cost of education between urban and rural areas as mainly the cost required for higher education such as colleges or universities. Therefore this π cannot apply to the child who does not go to college. However, π is used in this article because many families either send their children to college or ex ante expect them to go to college after migration to the urban area. The existence of π does not in any case seriously change the results of the model.
15. For dynastic utilities in eqq. (7) and (8) to be finite, it is necessary that O < [αβ/(1 - αα + ̂)] < 1, which may be written (αα + ̂ < 1 - αβ < 1 ).
16. Y. Mundlak, "The Dynamics of Resource Allocation," Lecture Note (University of Chicago, Department of Economics, 1988), chap. 9.
17. For example, see the following references: Korea Development Institute, Urban Poverty and Public Policy (Seoul: Korea Development Institute, 1983, 1989); Korea Research Institute for Human Settlement, Report on the Urban Poverty (Seoul: Korea Research Institute for Human Settlement, 1989); K. M. Yu, "Empirical Analysis on Determinants of Population Mobility," Korean Economic Review 39 (1991): 157-210.
18. For example, see the following references: Korea Development Institute, Urban Poverty and Public Policy (Seoul: Korea Development Institute, 1983, 1989); Korea Research Institute for Human Settlement, Report on the Urban Poverty (Seoul: Korea Research Institute for Human Settlement, 1989); K. M. Yu, "Empirical Analysis on Determinants of Population Mobility," Korean Economic Review 39 (1991): 157-210.
19. For example, see the following references: Korea Development Institute, Urban Poverty and Public Policy (Seoul: Korea Development Institute, 1983, 1989); Korea Research Institute for Human Settlement, Report on the Urban Poverty (Seoul: Korea Research Institute for Human Settlement, 1989); K. M. Yu, "Empirical Analysis on Determinants of Population Mobility," Korean Economic Review 39 (1991): 157-210.
20. 3 is the one related to child's migration, i.e., the staying decision.
21. S. Kim, "How Much Difference Do Tax Structures Give to Economic Growth?" (University of Chicago, Department of Economics, 1990, mimeographed).
22. One referee pointed out that use the "gamma" in the regression may reduce the collinearity between INCOME and GRWTHRAT. However, even without gamma, correlations between income variables and the growth rate are never serious for both Korea and the United States. For Korea (1963-88), the correlation between dynastic income ratio and growth rate is 0.1047 and the correlation between average income ratio and growth rate is 0.0389. For the United States (1960-87), theses correlations are 0.0749 and 0.1828, respectively.
23. D. Cavallo and Y. Mundlak, "On the Nature and Implications of Intersectoral Resource Allocations: Argentina 1913-1984" in Proceedings of the Eighth World Congress of the International Economic Association, ed. I. Adelman and S. Lane, vol. 4 (New York, 1989), pp. 143-60.
24. A. Barkley, The Determinants of Off-Farm Migration and Agricultural Investment in the U.S.: 1940 to 1985 (Ph.D. thesis, Chicago: University of Chicago, 1988).
25. In Tcha, Altruism and Migration - Korea and the U.S., another U.S. data set (1948-82) was used with a continuous series on nonfarm and farm disposable personal income. The results from these data also support the significance of the dynastic income variable while the current average income variable appears to be insignificant.