Who Leaves? Deciphering Immigrant Self‐Selection from a Developing Country

Using a novel data set from a developing country, the Federated States of Micronesia (FSM), I analyze an emigration flow to the United States that has no legal barriers to entry and contains detailed information on the immigrant at home and in the United States. I find that highly educated workers (relative to the home country average) have the highest likelihood of migrating from the FSM to the United States. I also compare the premigration wages for the migrants and an observationally equivalent matched nonmigrant group and find that there is a positive and statistically significant difference between the two groups, indicating that immigrants are also positively selected on unobserved characteristics. The observed selection is consistent with the relatively large differences in home country and destination skill prices at the highest skill levels. Information on the immigrants’ characteristics before migration is central to my analysis of determining the nature of immigrant self‐selection on both observable and unobservable characteristics. These results are informative of the self‐selection of immigration from a small developing country when legal immigration restrictions are removed.