nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2008‒06‒07
twelve papers chosen by
Yuji Tamura
Australian National University

  1. Local Public Funding of Higher Education when Students and Skilled Workers are Mobile By Thomas Lange
  2. Autocratic rule in ethnically-diverse societies By Amegashie, J. Atsu
  3. Crime and Ethnicity in London By Patacchini, Eleonora; Zenou, Yves
  4. The effect of minimum wages on immigrants' employment and earnings By Pia M. Orrenius; Madeline Zavodny
  5. Migration and the Wage-Settings Curve: Reassessing the Labor Market Effects of Migration. By Brücker, Herbert; Jahn, Elke J.
  6. On the Relative Gains to Immigration: A Comparison of the Labour Market Position of Indians in the USA, the UK and India By Jonathan Wadsworth; Augustin de Coulon
  7. Commuting times: Is there any penalty for immigrants? By Blázquez Cuesta, Maite; Llano, Carlos; Moral Carcedo, Julian
  8. Migrants as second-class workers in urban China? A decomposition analysis By Sylvie Démurger; Marc Gurgand; Li Shi; Yu Ximing
  9. Health Workforce and International Migration: Can New Zealand Compete? By Pascal Zurn; Jean-Christophe Dumont
  10. Health, Human Capital, and African American Migration Before 1910 By Trevon D. Logan
  11. Can Migrants Save Greece From Ageing? A Computable General Equilibrium Approach Using G-AMOS. By Nikos Pappas
  12. Does Foreign Remittances Reduce Government Spending? Long and Short Run Phenomenon By Shahbaz, Muhammad; Rehman, Jamshaid; Hussain, Waqar

  1. By: Thomas Lange (University of Konstanz, ifo Institute for Economic Research Munich & University of Paderborn)
    Abstract: The interregional mobility of high skilled workers might induce an underinvestment in local public higher education when sub-federal entities independently decide on education expenditures to maximize local output. This well-known result is due to interregional spillovers and provides a justification for coordinated education policy or rather a federal intervention. However, things might change completely when taking into account the interregional mobility of students. Now, local education expenditures not only affect labor migration (through wage differentials) but also student migration flows. The model in this paper then shows that local output maximization does not necessarily imply underprovision of higher education, since regions now have an incentive to attract students as future human capital. The stay rates of graduates in equilibrium and the sensitivity of wages to migration are key determinants of local policy. Furthermore, results depend on local government objectives or rather the weighting of natives relative to foreigners. Therefore, the paper also considers natives’ preferred local policy.
    Keywords: higher education, student mobility, labor mobility, local public finance
    JEL: I22 J61 H77
    Date: 2008–05
  2. By: Amegashie, J. Atsu
    Abstract: Richer and more educated citizens demand better governance than poorer citizens. They participate more in the political process, are more difficult to buy off, and tend to have the financial resources to support a revolt. An autocrat who is politically insecure may therefore not invest in income-enhancing goods like education, roads, the rule of law, etc. This argument is not new. The novelty of this paper is to argue that ethnic diversity and discrimination exacerbate an autocrat’s fear of the negative effect of high income or income-enhancing investments like public education on his political survival. The combination of ethnic diversity and the fear of survival results in low economic performance in ethnically-diverse autocracies. I show that under such circumstances, the proportion of national income that the autocrat appropriates to himself is increasing in the degree of ethnic diversity. An implication is that in such ethnically-diverse societies, kleptocrats may be better off with a bigger share of a smaller national income than they are with a smaller share of a bigger national income. Previous empirical work provides some support for my theory. I discuss applications and limitations of my results.
    Keywords: autocracy; ethnic diversity; kleptocracy; public capital; selectorate
    JEL: H11 P16
    Date: 2008–06–02
  3. By: Patacchini, Eleonora; Zenou, Yves
    Abstract: This paper studies the relationship between a community's ethnic population density and its crime rate. We compare the spatial distribution of crime and the black population across the 32 London boroughs. Once endogeneity and sorting issues are taken into account, we find that the higher is the density of the ethnic population in a given borough, the higher is the crime rate. This effect is still positive but lower for neighbouring boroughs and ceases to exist beyond a 40 minute driving distance. Social interactions between individuals of the same ethnic group are the most likely explanation for this positive relationship.
    Keywords: Crime; Ethnic minorities; Panel data; Social interactions; Spatial correlation
    JEL: C21 K42 R12
    Date: 2008–05
  4. By: Pia M. Orrenius; Madeline Zavodny
    Abstract: This study examines how minimum wage laws affect the employment and earnings of low-skilled immigrants and natives in the U.S. Minimum wage increases might have larger effects among low-skilled immigrants than among natives because, on average, immigrants earn less than natives due to lower levels of education, limited English skills, and less social capital. Results based on data from the Current Population Survey for the years 1994?2005 do not indicate that minimum wages have adverse employment effects among adult immigrants or natives who did not complete high school. However, low-skilled immigrants may have been discouraged from settling in states that set wage floors substantially above the federal minimum.
    Keywords: Immigrants ; Minimum wage ; Human capital ; Education ; Wages ; Employment
    Date: 2008
  5. By: Brücker, Herbert (University of Bamberg); Jahn, Elke J. (Department of Economics, Aarhus School of Business)
    Abstract: In this paper we examine the labor market effects of migration in Germany on basis of a wage-setting curve. The wage-setting curve relies on the assumption that wages respond to a change in the un- employment rate, albeit imperfectly. This allows one to derive the wage and employment effects of migration simultaneously in a gen- eral equilibrium framework. Using administrative micro data we find that the elasticity of the wage-setting curve is particularly high for young workers and workers with an university degree, while it is low for older workers and workers with a vocational degree. The wage and employment effects of migration are moderate: a 1 percent increase in the German labor force through immigration increases the aggregate unemployment rate by less than 0.1 percentage points and reduces average wages by 0.1 percent in the short run. While native workers benefit from increased wages and lower unemployment, foreign work- ers are adversely affected.
    Keywords: Migration; wage-setting curve; labor markets; panel data
    JEL: F22 J31 J61
    Date: 2008–05–01
  6. By: Jonathan Wadsworth; Augustin de Coulon
    Abstract: While most studies of the decision to immigrate focus on the absolute income differencesbetween countries, we argue that relative change in purchasing power or status, as capturedby an individual's ranking in the wage distribution, may also be important. This will in turnbe influenced by differential levels of supply, demand and migration costs across the skilldistribution and across countries. Using data on Indian immigrants in the United States andthe UK matched to comparable data on individuals who remained in India, we show that theaverage Indian immigrant will experience a fall in their relative ranking in the wagedistribution compared to the position they would have achieved had they remained in theorigin country. The fall in relative rankings is larger for immigrants to the UK than to theUS, and largest of all for those with intermediate skills.
    Keywords: immigration, wages, relative ranking
    JEL: J31 J61 J68
    Date: 2008–02
  7. By: Blázquez Cuesta, Maite (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Llano, Carlos (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Moral Carcedo, Julian (Departamento de Análisis Económico: Teoría e Historia Económica. Universidad Autónoma de Madrid)
    Abstract: Studying the relation between workers’ nationality and their commuting time has been of paramount importance in countries with high immigration rates and ethnical heterogeneity. Most of these studies focus on the spatial mismatch of racial minorities, and consider urban and social structures of the countries/cities where this segregation phenomenon may occur.Currently, immigration is one of the main challenges of the Spanish society. Foreign residents in Madrid region increased 639 % between 1996 and 2004. In this paper we explore the connection between commuting time, residential location and worker’s nationality using an ordered logit model. Our findings reveal that immigrants from ‘transition economies’ and ‘third world’ countries are significantly more likely to suffer higher commuting times compared to natives. These differences can be explained by both housing and labour market restrictions due to discrimination. This commuting penalty is in line with the spatial mismatch hypothesis and residential segregation.
    Keywords: Commuting flows; Immigration; Spatial mismatch; Labour mobility
    JEL: R15
    Date: 2008–05
  8. By: Sylvie Démurger (GATE, University of Lyon, CNRS, ENS-LSH, Centre Léon Bérard, France); Marc Gurgand (Paris School of Economics and Crest,France); Li Shi (School of Economics and Business, Beijing Normal University, China); Yu Ximing (School of Finance,Renmin University of China, Beijing, China)
    Abstract: In urban China, urban resident annual earnings are 1.3 times larger than long term rural migrant earnings as observed in a nationally representative sample in 2002. Using microsimulation, we decompose this difference into four sources, with particular attention to path dependence and statistical distribution of the estimated effects: (1) different allocation to sectors that pay different wages (sectoral effect); (2) hourly wage disparities across the two populations within sectors (wage effect); (3) different working times within sectors (hours effect); (4) different population structures (population effect). Although sector allocation is extremely contrasted, with very few migrants in the public sector and very few urban residents working as self-employed, the sectoral effect is not robust to the path followed for the decomposition. We show that the migrant population has a comparative advantage in the private sector: increasing its participation into the public sector does not necessarily improve its average earnings. The opposite holds for the urban residents. The second main finding is that population effect is significantly more important than wage or hours effects. This implies that the main source of disparity is pre-market (education opportunities) rather than on-market.
    Keywords: chinese labor market, discrimination, earnings differentials, migration
    JEL: J31 J71 O15 P23
    Date: 2008
  9. By: Pascal Zurn; Jean-Christophe Dumont
    Abstract: This paper examines health workforce and migration policies in New Zealand, with a special focus on the international recruitment of doctors and nurses. 2. The health workforce in New Zealand, as in all OECD countries, plays a central role in the health system. Nonetheless, maybe more than for any other OECD country, the health workforce in New Zealand cannot be considered without taking into account its international dimension. 3. New Zealand has the highest proportion of migrant doctors among OECD countries, and one of the highest for nurses. There is no specific immigration policy for health professionals, although the permanent and temporary routes make it relatively easy for doctors and nurses who can get their qualification recognised to immigrate in New Zealand. At the same time, New Zealand also has high emigration rates of health workers, mainly to other OECD countries. International migration is thus at the same time an opportunity and a challenge for the management of the human resources for health (HRH) in New Zealand. 4. Increasing international competition for highly skilled workers raises important issues such as sustainability and ability to compete in a global market. In this context, new approaches to improve the international recruitment of health workers, as well as developing alternative policies, may need to be considered. As for international recruitment, better coordination and stronger collaboration between main stakeholders could contribute to more effective and pertinent international recruitment. <BR>5. Ce document examine les effectifs de professionnels de la santé et les politiques migratoires de la Nouvelle-Zélande, en se concentrant plus particulièrement sur le recrutement international de médecins et d'infirmières. 6. En Nouvelle-Zélande comme dans tous les pays de l'OCDE, ces professionnels jouent un rôle crucial dans le système de santé. Dans ce pays, pourtant, peut-être plus que dans tout autre pays de l'OCDE, on ne saurait étudier les travailleurs de la santé sans prendre en compte la dimension internationale de cette population. 7. La Nouvelle-Zélande compte la proportion de médecins immigrés la plus élevée de tous les pays de l'OCDE, celle des infirmières immigrées comptant aussi parmi les plus fortes. Le pays ne s'est pas doté d'une politique d'immigration particulière concernant ces professions même si Les filières d'immigration permanente ou temporaire font qu'il est relativement facile pour les médecins et les infirmières qui parviennent à faire reconnaître leurs diplômes d'aller s'installer en Nouvelle-Zélande. En parallèle, le pays présente également des taux élevés d'émigration de travailleurs de la santé (principalement vers les autres pays de l'OCDE). En matière de gestion des ressources humaines de la santé, les migrations internationales représentent donc à la fois une chance et une difficulté pour la Nouvelle-Zélande. 8. La concurrence internationale croissante pour attirer des travailleurs hautement qualifiés soulève des problèmes importants comme la soutenabilité et la capacité à affronter cette concurrence sur un marché mondialisé. Dans ce contexte, il faudrait peut-être réfléchir à de nouvelles stratégies pour améliorer le recrutement international de travailleurs de la santé et élaborer d'autres mesures possibles. Quant à ce recrutement, l'amélioration de la coordination et le renforcement de la collaboration entre les principales parties prenantes pourraient contribuer à le rendre plus effectif et plus approprié.
    JEL: F22 I10 J12
    Date: 2008–05–22
  10. By: Trevon D. Logan
    Abstract: This is the first paper to document the effect of health on the migration propensities of African Americans in the American past. Using both IPUMS and the Colored Troops Sample of the Civil War Union Army Data, I estimate the effects of literacy and health on the migration propensities of African Americans from 1870 to 1910. I find that literacy and health shocks were strong predictors of migration and the stock of health was not. There were differential selection propensities based on slave status - former slaves were less likely to migrate given a specific health shock than free blacks. Counterfactuals suggest that as much as 35% of the difference in the mobility patterns of former slaves and free blacks is explained by differences in their human capital, and more than 20% of that difference is due to health alone. Overall, the selection effect of literacy on migration is reduced by one-tenth to one-third once health is controlled for. The low levels of human capital accumulation and rates of mobility for African Americans after the Civil War are partly explained by the poor health status of slaves and their immediate descendants.
    JEL: I1 I2 J1 J2 N3
    Date: 2008–05
  11. By: Nikos Pappas (Department of Economics, University of Strathclyde)
    Abstract: The population of Greece is projected to age in the course of the next three decades. This paper combines demographic projections with a multi-period economic Computable General Equilibrium (CGE) modelling framework to assess the macroeconomic impact of these future demographic trends. The simulation strategy adopted in Lisenkova et. al. (2008) is also employed here. The size and age composition of the population in the future depends on current and future values of demographic parameters such as the fertility, mortality rates and the level of annual net migration. We use FIV-FIV software in order to project population changes for 30 years. Total population and working age population changes are introduced to the G-AMOS modelling framework calibrated for the Greek economy for the year 2004. Positive net migration is able to cancel the negative impacts of an ageing population that would otherwise occur as a result of the shrinking of the labour force. The policy implication is that a viable, long-lasting migration policy should be implemented, while the importance of policies that could increase fertility should also be considered.
    Keywords: CGE modelling, ageing population, migration, demography, Greece
    JEL: J11 J21
    Date: 2008–03
  12. By: Shahbaz, Muhammad; Rehman, Jamshaid; Hussain, Waqar
    Abstract: In this study we endeavor to investigate the relationship between surge of remittances and government spending in Pakistan along with other determinants. For this we incorporate the advance modern econometrics techniques like FMOLS (Fully-Modified Ordinary Least Square) and ECM (Error Correction Method) for long and short run relationships respectively. The coefficient of remittances argues that surge of remittances insulate both government and domestic population from the vagaries of global economy. Moreover, this suggests that remittances are stable and unrequited source of development finance than other forms of capital flow that put constraint on government policies makers in Pakistan. Furthermore, our hypotheses has also been strongly supported by inclusion of non-linear term of remittances in regression, suggests that association of remittances with government spending is inverted U-shaped in the long run. Hence, support the linear relationship between government spending and remittances. Estimates of other variables such as GDP per capita and CPI reduce the government expenditures in longer periods, while worsens income distribution and trade-openness enhances the government spending. Urbanization and dependency ratio show decline in government spending. In short this study gives direction to policy makers to improve the pace of social activities in the Pakistan.
    Keywords: Remittance; Government Spending; FMOLS
    JEL: C00
    Date: 2008–03–01

This nep-mig issue is ©2008 by Yuji Tamura. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.