The Returns to Returning – Economic Returns to Remigration to Finland with Sibling Comparison

Weiqian Xia , Stockholm University
Jani Turunen, Södertörn University
Jan M. Saarela, Abo Academy University
Siddartha Aradhya, Stockholm University Demography Unit

How the experience of migration affects the labor market outcome after remigration is difficult to be causally examined since both migration and remigration processes are driven by various mechanisms of selection. In the current study, we investigate the labor market outcomes of return migration under the context of massive out-migration from Finland (mainly to Sweden) in the late 20th century and the subsequent remigration flow. Deploying Finnish population register data from 1987 to 2019, we use a unique sibling comparison design to estimate the labor market return of remigration. By comparing return migrants with their siblings of the same sex who have not migrated, we maximally rule out the confounding of family background and pre-adolescent experience. After controlling for sibling fixed-effects and individual demographic and socioeconomic characteristics, return migrants have substantially higher risks of unemployment and lower income levels compared to their siblings who have no migration experience. The gap exists across gender, educational level and migration destinations. However, the disadvantage also alleviates over time in the long run, especially for income once they are employed. Our results strengthen the previous findings in the literature that return migrants have disadvantages in the Finnish labor market, with a more rigorous sibling comparison design for causal inference. We argue that the labor market disadvantage of return migrants to Finland is likely due to the disruption of the career and the social network during the years spent abroad. However, the disadvantage can be reduced over time with the individuals' reintegration into the Finnish labor market.

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 Presented in Session 61. EuroMigration Insights: Unraveling Patterns and Returns in European Mobility