Returns to migration, education, and externalities in the European Union

This paper uses microeconomic data for more than 100,000 European individuals in order to analyse whether the individual economic returns to education vary between migrants and non-migrants and whether any differences in earnings between these two groups are affected by household and/or geographical (regional and interregional) externalities. The results point out that while education is a fundamental determinant of earnings, European labour markets do not discriminate in the returns to education between migrants and nonmigrants. Household, regional, and supra-regional externalities influence the economic returns to education in a similar way for local, intranational, and supra-national migrants. The results are robust to the introduction of a large number of individual, household, and regional controls.