Abstract:
What is the willingness of prospective migrants to increase their perceived risk of dying in order to increase their earnings? To answer this question, this paper sets up and analyzes a randomized field experiment, in which 3,319 prospective migrants from Nepal to Malaysia or the Persian Gulf countries are provided different information about wages and mortality incidences of Nepali workers in their choice destination. I find that information on mortality incidences lowers their expected mortality rate from migration and, for potential migrants without prior foreign migration experience, information on earnings lowers their expected earnings from migration. Using exogenous variation in expectations for inexperienced potential migrants generated by the experiment, I estimate an elasticity of migration with respect to expected earnings of 0.7 and an elasticity of migration with respect to expected mortality of 0.5. The experiment allows me to calculate the implicit trade-off the inexperienced potential migrants make between earnings and mortality risk, and hence the value of a statistical life (VSL) for these migrants. The estimates of the VSL are in the range of $0.28 million to $0.54 million ($0.97m – $1.85m in PPP$).