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Returns to return migration: wage premium of Estonian return migrants from Finland

Working papers 290

Writer(s): Kauhanen Merja and Kangasniemi Mari

This paper extends the earlier literature by providing new information on returns to return migration in three ways. First, we provide new information on the common return to returning in the East-West migration context, by focusing on the wage premium of the Estonian return migrants from Finland in comparison with the Estonians who have never lived abroad. Second, we also investigate the heterogeneity in the returns to returning by how well the return migrants performed in Finland. Third, we append our analysis by using qualitative questions about the benefits of stay in Finland for career progression after return. The data from a survey conducted in 2013 among a sample of working age (18-64-year-old) Estonian return migrants from Finland and a comparison group of working age Estonians who have never lived abroad were used in the analyses.

The main findings of this study suggest that the Estonian return migrants earn on average 14 per cent more than the stayers. By exploring the heterogeneity of the migration experience, we find evidence of differential returns to experience in Finland by how well the return migrants performed in the Finnish labour market. Those return migrants that had no earnings or belonged to the lower wage categories in Finland do not enjoy a statistically significant wage premium compared with the non-migrant Estonians, whereas those return migrants who belonged to the higher wage categories in Finland seem to enjoy a wage premium. Returners with the highest wage premium from their experience in Finland also perceive more frequently to have experienced a stronger career progression than they would have done if they had not lived in Finland.

Published: 6.2.2014
JEL: J24, J81
ISBN: 978-952-209-128-4 (pdf)
ISSN: 1795-1801 (pdf)
Publication (PDF)


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