nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2008‒07‒05
five papers chosen by
Yuji Tamura
Australian National University

  1. Exclusionary Policies in Urban Development, How under-servicing of migrant households affects the growth and composition of Brazilian cities By Leo Feler; J. Vernon Henderson
  2. Development of Wage Inequality for Natives and Immigrants in Germany : Evidence from Quantile Regression and Decomposition By Heiko Peters
  3. Does immigration affect the Phillips curve? Some evidence for Spain By Samuel Bentolila; Juan J. Dolado; Juan F. Jimeno
  4. Fair Wage Hypothesis, International Factor Mobility and Skilled-Unskilled Wage Inequality in a Developing Economy By Chaudhuri, Sarbajit; Banerjee, Dibyendu
  5. International Factor Mobility, Skills Formation and Welfare By Chaudhuri, Sarbajit

  1. By: Leo Feler; J. Vernon Henderson
    Abstract: Localities in developed countries often restrict construction and population growth through regulations governing land usage, lot sizes, building heights, and frontage requirements. In developing countries, such policies are less effective because of the existence of unregulated, informal housing markets. Cities in developing countries that seek to limit in-migration must also discourage entry into informal housing by providing low levels of public services to this sector. In this paper, we analyze the causes of slums, using data from Brazilian urban areas. We develop a model of the decisions that localities make to affect in-migration and find evidence that localities act strategically. Richer and larger localities in an urban area reduce provision of water and sewerage connections to the smaller houses in which poorer migrants would live to discourage the in-migration of these poorer migrants and deflect them to other localities. We also find that under-servicing smaller houses reduces the population growth rate of localities. Not only does it reduce the in-migration of low-educated households, it seems that, because of negative externalities, such under-servicing also reduces the growth rate of higher-educated households.
    JEL: D7 H7 J6 O15 O54 R5
    Date: 2008–06
  2. By: Heiko Peters
    Abstract: To study the development of wage inequality is important for the economic performance as well as for the development of employment. First, I estimate the remuneration to personal characteristics for Germans and immigrants across the wage distribution using quantile regression. My database is the German socio-economic panel for the period 1984-2006. I find a higher inequality between skill groups for Germans relative to immigrants. The returns to skill for the highest educational attainment are higher for Germans across the wage distribution compared to immigrants. But within-group inequality for the group with the highest educational attainment is higher for immigrants. Both groups have concave experience-earnings profiles. One more year of work experience increases the wage more for Germans. Secondly I use the decomposition method of Melly (2006). Decomposition methods are suitable to get further insights into the question as to whether or not the observable differences in the distribution are caused by the difference in the composition or differences in the estimated coefficients. Immigrants have a negative wage gap relative to Germans. The wage gap rises across the distribution and is due to a rising discrimination of immigrants across the wage distribution for the years 1992 and 2006. For the year 1984 the characteristic effect is responsible for the wage gap. Inequality rises for both groups between the year 1992 and 2006. The increase is much stronger for Immigrants. The coefficient effect is mainly responsible for the wage increase across time for both groups.
    Keywords: Wage inequality, immigrants, Germany, decomposition, quantile regression
    JEL: C2 D30 J31
    Date: 2008
  3. By: Samuel Bentolila (CEMFI); Juan J. Dolado (Universidad Carlos III de Madrid); Juan F. Jimeno (Banco de España)
    Abstract: The Phillips curve has flattened in Spain over 1995-2006: unemployment has fallen by 15 percentage points, with roughly constant inflation. This change has been more pronounced than elsewhere. We argue that this stems from the immigration boom in Spain over this period. We show that the New Keynesian Phillips curve is shifted by immigration if natives' and immigrants' labor supply or bargaining power differ. Estimation of the curve for Spain indicates that the fall in unemployment since 1995 would have led to an annual increase in inflation of 2.5 percentage points if it had not been largely offset by immigration.
    Keywords: Phillips curve, immigration
    JEL: E31 J64
    Date: 2008–06
  4. By: Chaudhuri, Sarbajit; Banerjee, Dibyendu
    Abstract: Agell and Lundborg (1995, Economica) have accommodated the fair wage hypothesis (FWH) in an otherwise 2×2 Hechscher-Ohlin-Samuelson model for examining the robustness of certain standard trade theorems. The present paper proposes to introduce the FWH in a three sector general equilibrium model with two types of labour: skilled and unskilled. Skilled labour is specific to the high-skill sector and receives the efficiency wage while unskilled labour in the other two sectors receives either the competitive wage or the high unionized wage. Using such a framework the consequences of international mobility of factors of production on the skilled-unskilled wage inequality and unemployment of skilled labour in a developing economy have been analyzed. Both foreign capital inflows and emigration of skilled labour improve the skilled-unskilled wage inequality under reasonable condition. Particularly, the result relating to emigration of skilled labour is counterintuitive.
    Keywords: Fair wage hypothesis; skilled labour; unskilled labour; wage inequality; Foreign capital; unemployment
    JEL: F13 J41 O15
    Date: 2008–06–20
  5. By: Chaudhuri, Sarbajit
    Abstract: The paper examines the welfare consequences of an inflow of foreign capital and an emigration of skilled labour in a small open economy in terms of a four sector general equilibrium model in the presence of endogenous skill formation and imperfection in the market for unskilled labour. It finds that both foreign capital and emigration of skilled labour may be welfare-improving although the outcomes of these policies depend on the relative capital intensities of different sectors and the magnitude of imperfection in the market for unskilled labour. Measures like labour market reform and capital subsidy (or tax) to the appropriate sector may be resorted to improve national welfare and ensure higher skills formation.
    Keywords: Foreign capital; Skills formation; Labour market imperfection; National welfare; Labour market reform
    JEL: F11
    Date: 2008–05–18

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