Get Rich or Die Tryin': Perceived Earnings, Perceived Mortality Rate and the Value of a Statistical Life of Potential Work-Migrants from Nepal

Abstract

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

Death scares: How potential work-migrants infer mortality rates from migrant deaths

“…Furthermore, the reported wages and fees from this source differ from the expectations of potential workers. In Shrestha (2017), I find that potential work migrants expect to earn much higher while abroad and pay much higher fees to migrate to these destinations. The discrepancy results from misinformation in part of the potential migrants as well as misreporting from migrants to DoFE.…”

“…In the first part of this section, I calculate the implied change in perceived mortality rate in response to a migrant death using estimates of earnings elasticity and the value of statistical life (VSL) from my companion paper (Shrestha, 2017). In the second part, I present a simple learning model of a…”

“…In this paper, I study how migration decision is affected by the death of migrants in the context of Nepali work-migrants to Malaysia and the Persian Gulf countries. I combine these estimates of migration responsiveness to death events, along with the estimate of the value of statistical life (VSL) and elasticities from Shrestha (2017) to infer how much each death changes a potential migrant's perceived mortality rate abroad.…”

“…Furthermore, I compute the change in perceived mortality risk for potential migrants following a single death event to show that the amount of updating is, in fact, too high. Using the estimates of earnings elasticity of migration from Shrestha (2017), I find that earnings need to go up by 15 percent to offset the migration response of a single death event. Further, using the estimate of the VSL from the same study, I find that the change in earnings translates to an increase in perceived two-year mortality rate of migration by 6.7 per thousand.…”

Testing for Repugnance in Economic Transactions: Evidence from Guest Work in the Gulf

“…McKenzie et al (2013) nd that permanent migrants from Tonga to New Zealand substantially underestimate their actual earnings at the des-tination, using a unique research design of randomized visa allocation that minimizes concerns that migration would be a ected by impressions regarding earnings. Shrestha (2017) nds that temporary migrants from Nepal to Malaysia and the Gulf with no prior migration experience substantially overestimate the true risk of death at the destination, as well as overestimating true earnings.…”