Migration, Self-selection and Returns to Education in the WAEMU

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Abstract
Using data from labour force surveys conducted simultaneously in the capital cities of seven West African Economic and Monetary Union countries, we estimate a model of residential location choice in which expected earnings play a role. The model is first estimated in a reduced form. Estimates are then used to correct for the endogeneity of locational choice in the earnings equations estimated for each country. We find that migration behaviour has a significant effect in shaping earnings differentials between education levels and between the seven capital cities. Corrected predicted earnings in each country are then used as an independent variable in a structural multinomial logit of residential choice. Results show that individuals tend to reside in countries in which their expected earnings are higher than elsewhere.
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