nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2008‒02‒02
six papers chosen by
Yuji Tamura
Australian National University

  1. Characteristics Of Migrant Entrepreneurship In Europe By Baycan-Levent, Tuzin; Nijkamp, Peter
  2. The Infrastructure and Other Costs of Immigration. By Musgrave, Ralph S.
  3. How Interethnic Marriages Affect the Educational Attainment of Children: Evidence from a Natural Experiment By Ours, J.C. van; Veenman, J.M.C.
  4. South-South Migration: The Impact of Nicaraguan Immigrants on Earnings, Inequality and Poverty in Costa Rica By Gindling, T. H.
  5. Why Remit? The Case of Nicaragua By Naufal, George
  6. Macroeconomic consequences of migration diversion : a CGE simulation for Germany and the UK By Baas, Timo; Brücker, Herbert

  1. By: Baycan-Levent, Tuzin (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Nijkamp, Peter
    Abstract: The present paper aims to investigate and compare various modalities of migrant entrepreneurship in European countries in order to design a systematic classification of migrant entrepreneurship and to highlight key factors of migrant entrepreneurship in Europe. The paper is based on a comparative assessment of available quantitative data and qualitative information derived from a broad review of findings from previous studies in the literature. Our quantitative evaluation includes the European OECD countries, while our qualitative investigation addresses migrant entrepreneurship experiences in eight European countries: Denmark, Germany, Greece, Italy, the Netherlands, Portugal, Sweden and the UK. The results of our comparative analysis show that the general picture of European migrant entrepreneurship is determined by some distinct push factors such as high unemployment rates and low participation rates or low status in the labour market as well as by an accompanying factor, viz. mixed embeddedness. The results of our comparative evaluation are summarized in a systematic typological table. These show that, while an informal and labour-intensive sector, an underground economy, and small companies and traditional households prompt migrant entrepreneurship in Southern European countries, an overrepresentation of non-Western immigrants among the self-employed, as well as relatively lower income levels of self-employed immigrants compared to both self-employed natives and employed immigrants are decisive for migrant entrepreneurship in Northern European countries.
    Date: 2007
  2. By: Musgrave, Ralph S.
    Abstract: Since 2002, the British Government department responsible for immigration, the Home Office, has claimed immigrants pay £2-5bn more in tax than they withdraw from the public purse. The workings behind this figure omit the cost of the additional infrastructure investments that immigrants necessitate (no small omission). The conventional wisdom is that funding government owned assets is a burden on the community at large, whereas funding private sector business assets is not. However the distinction between public and private sectors is artificial. Thus funding the private sector investments is just as much a burden on the community as funding the public sector. Thus it is the community at large funds the additional private sector business assets that immigrants necessitate. The important distinction is not between public and private sector assets, but between what might be called “communally used” assets (public and private) and assets which only one person or family benefits from, of which housing is much the most important. That is, the community at large does not pay for immigrants’ housing: immigrants themselves do. Assets other than housing in the UK amount to about £30,000 per head. The investment burden on the community is around double this because the typical immigrant has one child shortly after arriving. Immigrants do eventually pay this back – after about a generation. But by that time interest on the debt (which is not paid back) resembles the debt itself. Having arrived at a figure for the investment burden that immigrants impose, there is then the question as to what effect this has on the overall contribution that immigrants make, or burden that they impose. Answering this question involves answering a number of subsidiary questions about what can and cannot be debited to immigration. The four main subsidiary questions are thus. 1. Should the cost of educating immigrants’ children (£7.6bn a year) be attributed to immigration? The Home Office, Migrationwatch and others have disagreed on this for some time. It is shown that Migrationwatch is right: these educational costs should be attributed to immigration. 2. In past years, some Government current spending (as opposed to capital spending) was financed by increasing the national debt. Are immigrants (who have not benefited from this spending) effectively paying interest on this part of the national debt? If so, this would be unfair. It is shown that immigrants are not in fact paying for this past current spending. 3. Several studies have recently claimed that immigrants reduce interest rates. These studies all make the same mistake: they assume that interest rate reductions are the only weapon that governments have to raise demand with a view to employing extra workers (immigrants). In fact it is an expansion of the monetary base over the decades and centuries which has created the extra demand that immigrants necessitate. Moreover, interest rates have to rise a finite amount in reaction to immigration because someone somewhere has to forgo consumption to fund the additional investments that immigrants necessitate. 4. Do remittances reduce real incomes for natives? It is concluded that they do. The final figure for the cost imposed on UK natives by immigrants (about £12bn a year) is tentative, first because quantifying the variables that produce the £12bn is more informed guesswork than accurate measurement. Second, some of the official figures on which the estimate is based could be inaccurate. For example, there is evidence that the official figure for the total value of all assets in the UK could have been underestimated by 100% or more; and the real figure for remittances could conceivably be ten times the official figure. In short the cost imposed on UK natives by immigrants could easily be half or double the above £12bn.
    Keywords: Immigration; infrastructure; cost; Musgrave; Migrationwatch; IPPR; Home Office; immigrants; migration; education; children; interest rates; remittances.
    JEL: F22 J61 E4
    Date: 2008–01
  3. By: Ours, J.C. van; Veenman, J.M.C. (Tilburg University, Center for Economic Research)
    Abstract: The allocation of Moluccan immigrants across towns and villages at arrival in the Netherlands and the subsequent formation of interethnic marriages resemble a natural experiment. The exogenous variation in marriage formation allows us to estimate the causal effect of interethnic marriages on the educational attainment of children from such marriages. We find that children from Moluccan fathers and native mothers have a higher educational attainment than children from ethnic homogeneous Moluccan couples or children from a Moluccan mother and a native father.
    Keywords: Interethnic marriages;educational attainment
    JEL: I21 J15
    Date: 2008
  4. By: Gindling, T. H. (University of Maryland, Baltimore County)
    Abstract: More than half of those who emigrate from developing countries move to other developing countries, yet there have been few studies of the impact of this South-South migration. In this paper, we examine the impact of migration from one developing country, Nicaragua, on the labor market in another developing country, Costa Rica. We find little evidence to support the hypothesis that Nicaraguan migration to Costa Rica was an important factor contributing to falling earnings, increased inequality or stagnating poverty in Costa Rica.
    Keywords: inequality, earnings, migration, Latin America, Costa Rica, poverty
    JEL: J61 O15
    Date: 2008–01
  5. By: Naufal, George (American University of Sharjah)
    Abstract: In the last two decades remittances have gained interest due to their large size. For several developing countries remittances constitute a large portion of their GDP and sometimes exceed FDI. While FDIs are usually profit driven, it is not clear what the driving force behind remittances is. This paper presents a simple theoretical model of migrants' remitting behavior. I consider two general motivations for remitting: altruism and self-interest. Using a heteroskedastic Tobit with a known form of variance I test the findings of the theoretical model with data from Nicaragua. Evidence suggests that migrants from Nicaragua remit for altruistic reasons. Moreover some gender heterogeneity seems to exist in the remitting behavior.
    Keywords: altruism, censored regression, remittances, Central America, Nicaragua
    JEL: J61 O15 D64
    Date: 2008–01
  6. By: Baas, Timo (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Brücker, Herbert (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "This paper examines the macroeconomic consequences of the diversion of migration flows away from Germany towards the UK in the course of the EU Eastern Enlargement. The EU has agreed with the new member states from Central and Eastern Europe transitional periods for the free movement of workers. The selective application of migration restrictions during the transitional periods has resulted in a reversal of the pre-enlargement allocation of migration flows from the new member states across the EU: Germany as the main destination before enlargement attracts only modest immigration flows since 2004, while the UK and Ireland which have been only marginally affected by immigration prior to enlargement absorb about 60% of the inflows in the post-enlargement period. The macroeconomic effects of this diversion process is analysed in this paper on the basis of a CGE model which considers wage rigidities. We find that higher migration is associated with larger GDP and employment gains, but also with a smaller wage increase and a smaller decline of the unemployment rate. The diversion of migration flows away from Germany towards the UK yields thus a higher GDP and employment growth in the UK. The joint GDP of Germany and the UK declines by 0.1 per cent as a consequence of the migration restrictions." (author's abstract, IAB-Doku) ((en))
    JEL: F15 F22 C68 J61 J30
    Date: 2008–01–28

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