Proximity-Sensitive Relative Deprivation and International Migration Intentions

This paper aims to re-examine the relation between relative deprivation (RD) and international migration intentions when people demonstrate asymmetric proximity preferences towards higher-income reference individuals on the income ladder. We consider three cases: the conventional linear case, in which all comparisons with higher-income individuals have equal weight; the rising proximity preferences, in which individuals assign increasing weights to reference groups as they get closer on the income ladder; and when individuals are more sensitive to income changes of the far wealthier. We use Gallup's individual-level survey data on 129 countries, between 2009 and 2017. We find that the international migration-RD relation depends on the proximity preferences along the income distribution and across risk-tolerance levels. The common wisdom that people migrate to enhance their relative positions is found robust only among the poorest and the more risk-tolerant populations, under different proximity preferences assumptions. This paper provides deeper understanding on how policies directed to reducing income inequality and poverty may impact migration outcomes in sending countries when the target population exhibits proximity-sensitive RD.