nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2008‒05‒05
four papers chosen by
Yuji Tamura
Australian National University

  1. Worker remittances and government behaviour in the receiving countries. By Ziesemer, Thomas
  2. The Immigrant Earnings Disadvantage Across the Earnings and Skills Distributions: The Case of Immigrants from the EU's New Member States in Ireland By Alan Barrett; Seamus McGuinness; Martin O'Brien
  3. The Fallacy of Crowding-Out: A Note on "Native Internal Migration and the Labor Market Impact of Immigration" By Peri, Giovanni; Sparber, Chad
  4. Income per natural: Measuring development as if people mattered more than places By Michael Clemens and; Lant Pritchett

  1. By: Ziesemer, Thomas (UNU-MERIT, Maastricht University)
    Abstract: We estimate the impact of worker remittances on savings, taxes, and public expenditures on education, all as a share of GDP, for about thirty years in two samples of countries with per capita income above and below $1200 using dynamic panel data methods. Governments of the poorer sample raise less taxes in the short run but more in the long run and spend more money on education when remittances come in; in the richer sample they raise less taxes and spend less on education in response to remittances but this is almost completely compensated by the positive response of expenditure on education to higher savings, which results from remittances as well.
    Keywords: Remittances, Tax Revenue, Government Expenditure, Education
    JEL: F24 H20 H52
    Date: 2008
  2. By: Alan Barrett (Economic and Social Research Institute (ESRI)); Seamus McGuinness (Economic and Social Research Institute (ESRI)); Martin O'Brien (Economic and Social Research Institute (ESRI))
    Abstract: As the movement of population from the New Member States (NMS) of the EU to the older members is a relatively new flow, it is important to build up our knowledge of who is moving within Europe and how they are performing in their destinations. In this paper, we analyse the earnings of immigrants in Ireland from the NMS using a new large-scale dataset on employees in Ireland. In so doing, we add to the emerging strand in the literature on immigrant earnings that looks beyond average earnings differentials and considers variations in such differentials across the earnings and skills distributions. We do this partly by using quantile regressions and also by analyzing earnings differentials within educational categories. We find that the average earnings difference between immigrants from the NMS and natives is between 10 percent and 18 percent, depending on the controls used. However, the difference is found to be either non-existent or low for people with low skill levels and for people at the lower end of the earnings distribution. The difference is higher for those at the upper ends of the skills and earnings distributions. This suggests that the transferability of human capital is a crucial determinant of the immigrant-native earnings gap for NMS immigrants in Ireland.
    Keywords: Immigrant earnings; Ireland; New Member States; Quantile regression
    Date: 2008–04
  3. By: Peri, Giovanni (Department of Economics, University of California, Davis); Sparber, Chad (Department of Economics, Colgate University)
    Abstract: In “Native Internal Migration and the Labor Market Impact of Immigration,” George Borjas (2006) identifies a strong negative correlation between immigration and native-born employment in the US using local area data. This relationship is particularly strong at the metropolitan area level, weaker but still significant at the state level, and weakest at the Census region level. In this note, we show that Borjas’s negative correlation arises due to the construction of the dependent and explanatory variables rather than from any true negative association between the employment growth of immigrants and natives. Borjas regresses log native employment, ln(N_t), on the share of foreign-born employment, p_t=M_t/(M_t+N_t), across skill-state-year cells. The specification therefore includes native employment in the numerator of the dependent variable and in the denominator of the explanatory variable. This builds a negative correlation into the model that is particularly strong if the variance of N_t relative to M_t is large. To illustrate, we first show that state and city level regressions of the standardized native employment change, (N_(t+10)-N_t)/(M_t+N_t), on standardized immigration, (M_(t+10)-M_t)/(M_t+N_t), always find a positive and mostly significant correlation between the two. Second, we randomly simulate changes in the native and foreign-born workforce with a data generating process that has zero or positive correlation between the shocks Change_M_t and Change_N_t (i.e., so that immigration is associated with either no change or an increase in native employment). Borjas specifications employing this simulated data estimate large and significantly negative coefficients as long as the variance of Change_N_t is larger than the variance of Change_M_t, which is true in observed data.
    Keywords: Immigration, Crowding Out, Employment Effects
    JEL: J61 R23
    Date: 2008–01–15
  4. By: Michael Clemens and; Lant Pritchett
    Abstract: It is easy to learn the average income of a resident of El Salvador or Albania. But there is no systematic source of information on the average income of a Salvadoran or Albanian. We create a first estimate a new statistic: income per natural—the mean annual income of persons born in a given country, regardless of where that person now resides. If income per capita has any interpretation as a welfare measure, exclusive focus on the nationally resident population can lead to substantial errors of the income of the natural population for countries where emigration is an important path to greater welfare. The estimates differ substantially from traditional measures of GDP or GNI per resident, and not just for a handful of tiny countries. Almost 43 million people live in a group of countries whose income per natural collectively is 50% higher than GDP per resident. For 1.1 billion people the difference exceeds 10%. We also show that poverty estimates are very different for national residents and naturals; for example, 26 percent of Haitian naturals who are not poor by the two-dollar-a-day standard live in the United States. These estimates are simply descriptive statistics and do not depend on any assumptions about how much of observed income differences across naturals is selection and how much is a pure location effect. Our conservative, if rough, estimate is that three quarters of this difference represents the effect of international migration on income per natural. This means that departing one’s country of birth is today one of the most important sources of poverty reduction for a large portion of the developing world. If economic development is defined as rising human well being, then a residence-neutral measure of well-being emphasizes that crossing international borders is not an alternative to economic development, it is economic development.
    Keywords: economic development, migration
    JEL: F22 O15
    Date: 2008–03

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