nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2010‒05‒22
twenty papers chosen by
Yuji Tamura
Australian National University

  1. The Dynamics of Immigration and Wages By Silvia Helena Barcellos
  2. Temporary Migration, Remittances and Agriculture By Vanzetti, David
  3. Measuring Economic and Social Impacts of Migration in Colombia: New evidence By Mauricio Cárdenas; Carlos Medina; Andrés Trejos
  4. Internal migration in Ghana : determinants and welfare impacts By Ackah, Charles; Medvedev, Denis
  5. Accommodating migration to promote adaptation to climate change By Barnett, Jon; Webber, Michael
  6. Small state regional cooperation, south-south and south-north migration, and international trade By Schiff, Maurice
  7. Accounting for selectivity and duration-dependent heterogeneity when estimating the impact of emigration on incomes and poverty in sending areas By Gibson, John; McKenzie, David; Stillman, Steven
  8. Bidding for Brains: Intellectual Property Rights and the International Migration of Knowledge Workers By McAusland, Carol; Kuhn, Peter J.
  9. Do Brain Drain and Poverty Result from Coordination Failures? By David de la Croix; Frédéric Docquier
  10. The Aid Migration Trade-Off By Azam, Jean-Paul; Berlinschi, Ruxanda
  11. An Incentive Mechanism to Break the Low-skill Immigration Deadlock By David de la Croix; Frédéric Docquier
  12. Legalization and the Economic Status of Immigrants By Silvia Helena Barcellos
  13. The Heterogeneous Labor Market Effects of Immigration By Mathis Wagner
  14. Remittances, Inflation and Exchange Rate Regimes in Small Open Economies By Ball, Christopher; Lopez, Claude; Reyes, Javier; Cruz-Zuniga, Martha
  15. Changing Research Perspectives on the Global Health Workforce By Till Bärnighausen; David Bloom
  16. A History of Violence: Testing the ‘Culture of Honor’ in the US South By Pauline Grosjean
  17. Migration, wages, and parental background: Obstacles to entrepreneurship and growth in East Germany By Zoë Kuehn
  18. Trade and migration with renewable natural resources : out-of-steady-state dynamics By Lopeza, Ramon
  19. The Graying of Global Population and Its Macroeconomic Consequences By David E. Bloom; David Canning; Gunther Fink
  20. Trade and Migration with Renewable Natural Resources: Out-of-Steady-State Dynamics By López, Ramón; Schiff, Maurice

  1. By: Silvia Helena Barcellos
    Abstract: There is considerable debate in the literature about the effects of immigration on workers' labor market outcomes. This paper presents a new approach to the analysis of the relationship between immigration and wages based on a panel vector autoregression (VAR). The VAR analysis of a panel of US states shows that immigration does not have a significant effect on wages or internal migration. By contrast, wages do affect immigration: a 10 percent increase in wages causes up to a 20 percent increase in immigrant inflow. The effect is strongest for low-skill immigrants while it is small and insignificant for high-skill immigrants.
    Keywords: immigration, internal migration, wages, panel vector autoregression
    JEL: J01 J20 J30 J61
    Date: 2010–03
  2. By: Vanzetti, David
    Abstract: Discussions within the World Trade Organization on the temporary movement of labour across borders have met with limited success, in spite of the potential benefits to both home and destination countries. Developed countries have been reluctant to allow increased immigration because of concerns about the social and economic impacts of integrating foreign workers. Recently available bilateral data on current migration flows, differences in wages and remittances makes it possible to estimate the potential impacts of temporary migration on wages and national income. Using a general equilibrium model that separates skilled and unskilled labour, we show that a three per cent increase in the labour force due to increased migration would increase national income in Australia and New Zealand by an estimated US$5 billion annually. Remittances sent abroad would amount to an additional US$750 million. Most developing country regions would benefit. More specifically, allowing in 10,000 temporary unskilled workers to work in the agricultural sector in Australia generates estimated welfare gains of US$100 million.
    Keywords: Migration, trade, GATS mode 4, International Development, F13, Q17,
    Date: 2010
  3. By: Mauricio Cárdenas; Carlos Medina; Andrés Trejos
    Abstract: This paper analyses a comprehensive dataset on migration using robust econometric methodologies to assess a range of economic and social impacts of migration on individuals and households left behind. Our findings indicate that there is no significant impact on labour force participation in households with migrants, but remittances do appear to have a negative effect on labour force participation. Migration (either absent or returned) increases total per capita expenditure by nearly US$35 per month while households that receive remittances increase per capita expenditures by US$49 per month on average. Expenditures in health and education also increase. However, there is no effect on school attendance, while individuals living in a household with an absent migrant are almost 4 per cent less likely to state that their health is good. Households with migration experience are around 8 per cent less likely to keep their immediate families together, with this effect particularly pronounced in the sub-group of households with return migrants. Our policy recommendations emphasize the importance of family reunification, and issue that deserves more decisive policy actions on the part of the Colombian government.
    Date: 2010–05–13
  4. By: Ackah, Charles; Medvedev, Denis
    Abstract: Using a recently compiled dataset on migration and remittances in Ghana, this paper estimates the determinants of an individual’s likelihood to be an internal migrant and the relationship between internal migration and welfare. The analysis finds that the likelihood to migrate is determined by a combination of individual (pull) and community-level (push) characteristics. The probability of migration is higher for younger and more educated individuals, but communities with higher levels of literacy, higher rates of subsidized medical care, and better access to water and sanitation are less likely to produce migrants. The analysis finds that households with migrants tend to be better off than similar households without migrants, even after controlling for the fact that households with migrants are a non-random sample of Ghanaians. However, the positive relationship is only true for households with at least one migrant in urban areas; the welfare of households with migrants exclusively in rural areas is no different from households without any migrants.
    Keywords: Population Policies,Anthropology,Gender and Development,Remittances,Voluntary and Involuntary Resettlement
    Date: 2010–04–01
  5. By: Barnett, Jon; Webber, Michael
    Abstract: This paper explains how climate change may increase future migration, and which risks are associated with such migration. It also examines how some of this migration may enhance the capacity of communities to adapt to climate change. Climate change is likely to result in some increase above baseline rates of migration in the next 40 years. Most of this migration will occur within developing countries. There is little reason to think that such migration will increase the risk of violent conflict. Not all movements in response to climate change will have negative outcomes for the people that move, or the places they come from and go to. Migration, a proven development strategy, can increase the capacity of communities to adapt to climate change. The fewer choices people have about moving, however, the less likely it is that the outcomes of that movement will be positive. Involuntary resettlement should be a last resort. Many of the most dire risks arising from climate-motivated migration can be avoided through careful policy. Policy responses to minimize the risks associated with migration in response to climate change, and to maximize migration’s contribution to adaptive capacity include: ensuring that migrants have the same rights and opportunities as host communities; reducing the costs of moving money and people between areas of origin and destination; facilitating mutual understanding among migrants and host communities; clarifying property rights where they are contested; ensuring that efforts to assist migrants include host communities; and strengthening regional and international emergency response systems.
    Keywords: Population Policies,Climate Change Mitigation and Green House Gases,Health Monitoring&Evaluation,Climate Change Economics,Voluntary and Involuntary Resettlement
    Date: 2010–04–01
  6. By: Schiff, Maurice
    Abstract: This paper provides a different basis than previous analyses for regional bloc formation and regional migration. Due to low bargaining power and fixed costs, small states face a severe disadvantage in negotiations with the rest of the world and might benefit by forming a regional bloc. The study a) presents a general equilibrium model where bargaining power, international and regional negotiation costs, number of issues negotiated, and accession rule to the bloc determine its size and welfare impact; and b) examines the impact of international migration as well as the migration-trade relationship. The main findings are: i) the likelihood of regional bloc formation, its size and welfare impact, increases with international negotiation costs and the number of issues negotiated, and decreases with regional negotiation costs; ii) bloc size is optimal (below the optimum) if an accession fee is (is not) charged; iii) South-South migration raises bloc size and welfare; iv) South-South migration and trade are complements under market access negotiations and are substitutes under negotiations for unilateral transfers as well as under migrant remittances; and v) South-North migration and bloc formation, and South-North and South-South migration, are substitutes for the states that benefit from membership in the bloc.
    Keywords: Trade and Regional Integration,Population Policies,Economic Theory&Research,Post Conflict Reconstruction,Regional Economic Development
    Date: 2010–05–01
  7. By: Gibson, John; McKenzie, David; Stillman, Steven
    Abstract: The impacts of international emigration and remittances on incomes and poverty in sending areas are increasingly studied with household survey data. But comparing households with and without emigrants is complicated by a triple-selectivity problem: first, households self-select into emigration; second, in some emigrant households everyone moves while others leave members behind; and third, some emigrants choose to return to the origin country. Allowing for duration-dependent heterogeneity introduces a fourth form of selectivity -- one must now worry not just about whether households migrate, but also when they do so. This paper clearly sets out these selectivity issues and their implications for existing migration studies, and then addresses them by using survey data designed specifically to take advantage of a randomized lottery that determines which applicants to the over-subscribed Samoan Quota may immigrate to New Zealand. The analysis compares incomes and poverty rates among left behind members in households in Samoa that sent Samoan Quota emigrants with those for members of similar households that were unsuccessful in the lottery. Policy rules control who can accompany the principal migrant, providing an instrument to address the second selectivity problem, while differences among migrants in which year their ballot was selected allow for estimation of duration effects. The authors find that migration reduced poverty among former household members, but they also find suggestive evidence that this effect may be short-lived as both remittances and agricultural income are negatively related to the duration that the migrant has been abroad.
    Keywords: Population Policies,Small Area Estimation Poverty Mapping,Anthropology,Housing&Human Habitats,Remittances
    Date: 2010–04–01
  8. By: McAusland, Carol (University of British Columbia, Vancouver); Kuhn, Peter J. (University of California, Santa Barbara)
    Abstract: We introduce international mobility of knowledge workers into a model of Nash equilibrium IPR policy choice among countries. We show that governments have incentives to use IPRs in a bidding war for global talent, resulting in Nash equilibrium IPRs that can be too high, rather than too low, from a global welfare perspective. These incentives become stronger as developing countries grow in size and wealth, thus allowing them to prevent the 'poaching' of their 'brains' by larger, wealthier markets.
    Keywords: intellectual property rights, development, brain drain, international labor migration
    JEL: F22 J6 O34
    Date: 2010–05
  9. By: David de la Croix (IRES and CORE, Université catholique de Louvain); Frédéric Docquier (National Fund for Scientific Research (Belgium) and IRES, Université catholique de Louvain)
    Abstract: We explore the complementarities between high-skill emigration and poverty in developing countries. We build a model endogenizing human-capital accumulation, high-skill migration and productivity. Two countries sharing the same characteristics may end up either in a “low poverty/low brain drain” path or in a “high poverty/high brain drain” path. After identifying country-specific parameters, we find that, for a majority of countries, the observed equilibrium has higher income than the other possible one. In 22 developing countries (including 20 small states with less than 2 million inhabitants), poverty and high brain drain are worsened by a coordination failure. For 25 other countries, a radical worsening of economic performances is feasible. These results are fairly robust to identification assumptions and the inclusion of a brain-gain mechanism.
    Keywords: Public Good, Inequality Aversion, Immigration policy.
    JEL: F22 D58 D6 D7
    Date: 2010–05
  10. By: Azam, Jean-Paul; Berlinschi, Ruxanda
    Date: 2009–08
  11. By: David de la Croix (IRES and CORE, Université catholique de Louvain); Frédéric Docquier (National Fund for Scientific Research (Belgium) and IRES, Université catholique de Louvain)
    Abstract: Although movements of capital, goods and services are growing in importance, workers movements are impeded by restrictive policies in rich countries. Such regulations carry substantial economic costs for developing countries, and prevent global inequality from declining. Even if rich countries are averse to global inequality, a single country lacks incentives to welcome additional migrants as it would bear the costs alone while the benefits accrue to all rich states. Aversion to global inequality confers a public good nature to the South-North migration of low-skill workers. We propose an alternative allocation of labor maximizing global welfare subject to the constraints that the rich countries are at least as well off as in the current “nationalist” (or “Nashionalist”) situation. This “no regret” allocation can be decentralized by a tax-subsidy scheme which makes people internalize the fact that as soon as a rich country welcomes an additional migrant, global inequalities are reduced, and each citizen in the rich world is better off too. Our model is calibrated using statistics on immigration, working-age population and output. We simulate the proposed scheme on different sets of rich countries.
    Keywords: Public Good, Inequality Aversion, Immigration policy.
    JEL: F22 D58 D6 D7
    Date: 2010–05
  12. By: Silvia Helena Barcellos
    Abstract: This paper investigates the impact of legalization on the economic outcomes of the legalized population. It uses a natural experiment caused by the 1986 Immigration Reform and Control Act (IRCA) which gave amnesty for undocumented immigrants who could prove continuous residence in the U.S. after January 1, 1982. The arbitrary cutoff date on the eligibility criteria causes a discontinuity in the relationship between the year of immigration and the probability of being legal. This paper uses this discontinuity to identify the causal impacts of legalization on immigrants' outcomes. Regression discontinuity and difference-in-differences estimates show that immigrants eligible for the policy have a significantly higher probability of being naturalized citizens than those who were not. Legalization is also found to have a positive and significant effect on wages, a negative effect on the probability of working in a traditionally illegal occupation, and no significant effect on geographical mobility. The analysis for different demographic groups confirms such conclusions and shows that the estimated effects of legalization are larger for low-educated Latin American immigrants, the group that was disproportionably affected by the policy.
    Date: 2010–03
  13. By: Mathis Wagner (CeRP - Collegio Carlo Alberto, Turin)
    Abstract: In this paper I provide estimates of the impact of immigration on native wage and employment levels (rather than on wage inequality which has been the focus of the literature). I use variation within 2-digit industries across regions using Austrian panel data from 1986 to 2004 for identification. Using an instrumental variable strategy I find large displacement effects in the service sector and large native employment increases in manufacturing due to immigration. This heterogeneous response is explained by large increases in output in manufacturing, due to a high elasticity of product demand, as immigration reduces the cost of production, while on average demand is far less elastic in service industries. Estimated substitution effects, for a given level of output, are large in both industries and in line with US estimates. The structural estimates imply that a 10% increase in the number of immigrants in all industries reduces average native wages by around 0.25% and results in 4% of the native labor force changing industry, primarily from services to manufacturing. Hence, the effect of immigration on worker relocation across industries is far larger than its impact on average native wages.
    Date: 2010–02
  14. By: Ball, Christopher; Lopez, Claude; Reyes, Javier; Cruz-Zuniga, Martha
    Abstract: Remittances are private monetary transfers. Yet the rapidly growing literature on the subject often ignores the role that exchange rate regimes play in determining the effect remittances have on a recipient economy. This paper uses a theoretical model and panel vector autoregression techniques to explore the role exchange rate regimes play in understanding the effect of remittances. The analysis considers yearly and quarterly data for seven Latin American countries. Our theoretical model predicts that remittances should temporarily increase inflation and generate an increase in the domestic money supply under a fixed regime, but temporarily decrease inflation and generate no change in the money supply under a flexible regime. These differences are borne out in the data. This adds to our understanding of the true effect of remittances on economies and suggests that other results in the literature that do not control for regimes may be biased.
    Keywords: Remittances; exchange rate regimes
    JEL: F22 F41
    Date: 2010–05
  15. By: Till Bärnighausen (Harvard School of Public Health); David Bloom (Harvard School of Public Health)
    Abstract: Past research on the health workforce can be structured into three perspectives – “health workforce planning” (1960 through 1970s); “the health worker as economic actor” (1980s through 1990s); and “the health worker as necessary resource” (1990s through 2000s). During the first phase, shortages of health workers in developed countries triggered the development of four approaches to project future health worker requirements. We discuss each approach and show that modified versions are experiencing a resurgence in current studies estimating health worker requirements to meet population health goals, such as the United Nations’ health-related Millennium Development Goals. A perceived “cost explosion” in many health systems shifted the focus to the study of the effect of health workers’ behavior on health system efficiency during the second phase. We review the literature on one example topic: health worker licensure. In the last phase, regional health worker shortages in developing countries and local shortages in developed countries led to research on international health worker migration and programs to increase the supply of health workers in underserved areas. Based on our review of existing studies, we suggest areas for future research on the health workforce, including the transfer of existing approaches from developed to developing countries.
    Keywords: Research perspectives, Global Health Workforce
    Date: 2010–05
  16. By: Pauline Grosjean (University of San Francisco)
    Abstract: Using historical data on early settlers to the United States, this paper tests and confirms the “Culture of Honor” hypothesis by socio-psychologists Dov Cohen and Richard Nisbett (1994, 1996). This hypothesis argues that the high prevalence of homicides in the US South stems from the fact that it was a frontier region settled by people whose economy was based on herding: the Scotch-Irish. Herding societies develop cultures of honors for reasons having to do with their precariousness: violence is a necessary condition to preserve a reputation for toughness and deter animal theft. Using historical census data on waves of settlers from Europe and relating contemporaneous violence to early Scotch-Irish settlers, this paper provides a test of the link between Scotch-Irish settlers and the culture of honor. The results confirm that high numbers of Scotch-Irish immigrants to the US South by 1790 are associated with higher homicide rates today, including homicides by white offenders. Similar results do not hold for different origins of migrants or other violent crime or offenses. The effect is stronger in counties with high headcounts of pigs and sheep in the 19th century, confirming the herding origin of the culture of honor. An important contribution of this paper is to suggests an instrument for violence, based on past economic occupations and ecological suitability for herding vs. farming.
    Keywords: Cuture of honor, US South
    JEL: K4 Z Z13
    Date: 2010–05
  17. By: Zoë Kuehn (Universidad Carlos III de Madrid)
    Abstract: For the last decade, the East German economy has been suffering from high unemployment and low economic growth. Policy makers often point to the lack of entrepreneurship as one of East Germany\'s main problems. This paper addresses the question of how East Germany\'s integration into an established economy, West Germany, may have hindered a fruitful development of entrepreneurship and how this may have affected economic growth. I build a model economy that places Lucas\'s (1978) span-of-control model into an overlapping-generations framework. Following Hassler and Rodríguez Mora (2000) managerial knowhow is defined as a combination of two factors, innate talent and entrepreneurial parental background, and growth depends on the innate talent of entrepreneurs. In East Germany, the lack of entrepreneurial parental background makes talent the decisive factor in occupational choice and more talented entrepreneurs should contribute to high growth rates. However, three key aspects of its integration into West Germany inhibit this mechanism: 1) the unrestricted mobility of East Germans to the West, 2) the policy of fixing East German wages as fractions of West German wages, and 3) the importance of parental background for entrepreneurship in West Germany. Counterfactual experiments show that eliminating any of these three aspects leads to more entrepreneurs, less unemployment, and higher economic growth in East Germany.
    Keywords: entrepreneurship; allocation of talent; social mobility; transition
    JEL: F15 E24 J22
    Date: 2010–05–12
  18. By: Lopeza, Ramon
    Abstract: Commodity price increases associated with the entry of China, India, and other countries into the world economy have led to increased pressure on common-property renewable natural resources. The problem is particularly worrisome for economies that obtain a large share of their income from the exploitation of natural resources in the production of an exportable commodity. This paper contributes to the analysis by examining the issue in the framework of a general equilibrium dynamic model and by solving for both the steady state and the transition dynamics. The authors show that i) a resource-rich, capital-poor economy is more likely to be subject to a"natural resource curse"and complete (irreversible) depletion of natural resources; ii) the latter's likelihood rises with the relative commodity price and labor inflow; iii) a labor inflow under internal equilibrium results in a higher steady-state capital-labor ratio and manufacturing output, and unchanged natural resources and commodity output; iv) import and export taxes result in larger steady-state natural resources and commodity output and smaller capital stock and manufacturing output, and may prevent complete depletion of natural resources; and v) the latter may also be prevented through capital inflows (foreign aid), labor outflow ( liberalization of the North's immigration policy), improved regulation, technical change, and a production tax.
    Keywords: Economic Theory&Research,Political Economy,Emerging Markets,Population Policies,Debt Markets
    Date: 2010–05–01
  19. By: David E. Bloom (Harvard School of Public Health); David Canning (Harvard School of Public Health); Gunther Fink (Harvard School of Public Health)
    Abstract: Population aging is emerging as a major demographic trend in many countries, with potentially important implications for a variety of macroeconomic issues. Notwithstanding these challenges, population aging will likely have a comparatively modest effect on economic growth. Although the changed age distribution would be expected to cause the labor force participation rate to decrease, the ratio of labor force to population will actually increase in most countries. This will occur because the lower youth dependency rate and the increased rate of female labor force participation – both of which may reasonably be expected to follow from the fertility rate declines that are driving population aging – will counterbalance the shifting of adults toward older ages at which labor force participation and savings rates are lower. Behavioral and policy responses to population aging – including higher savings for retirement, a higher rate of human capital accumulation, alternate pension funding plans, and (possibly) increased migration from labor-abundant to labor-scarce countries – also suggest that population aging need not necessarily significantly impede economic growth.
    Keywords: Global population, macroeconomics, aging
    Date: 2010–05
  20. By: López, Ramón (University of Maryland at College Park); Schiff, Maurice (World Bank)
    Abstract: Commodity price increases associated with the entry of China, India and other countries into the world economy has led to increased pressure on common-property renewable natural resources (NR). The problem is particularly worrisome for economies that obtain a large share of their income from the exploitation of NR in the production of an exportable commodity. This paper contributes to the analysis by examining the issue in the framework of a general equilibrium dynamic model and by solving for both the steady state and the transition dynamics. We show that i) a resource-rich, capital-poor economy is more likely to be subject to a "natural resource curse" and complete (irreversible) NR depletion; ii) the latter's likelihood rises with the relative commodity price and labor inflow; iii) a labor inflow under internal equilibrium results in a higher steady-state capital-labor ratio and manufacturing output, and unchanged NR and commodity output; iv) import and export taxes result in a larger steady-state NR and commodity output and a smaller capital stock and manufacturing output, and may prevent complete NR depletion; and v) the latter may also be prevented through capital inflows (foreign aid) and labor outflow (openness by the North), improved regulation, technical change and a production tax.
    Keywords: renewable natural resources, depletion, transition dynamics, steady state, trade, migration, capital flows
    JEL: F22 O13 O15 Q17 Q27
    Date: 2010–05

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