nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2010‒10‒23
twelve papers chosen by
Yuji Tamura
Australian National University

  1. Job and residential mobility in the Netherlands: the influence of human capital, household composition and location By Kronenberg, Kristin; Carree, Martin
  2. Migrant Networks as substitute for institutions: Evidence from Swiss trade By Pierre-Louis Vézina
  3. The link between immigration and trade in developing countries By José Vicente Blanes
  4. Immigration, Offshoring and American Jobs By Gianmarco I.P. Ottaviano; Giovanni Peri; Greg C. Wright
  5. Birth Rates and Border Crossings: Latin American Migration to the US, Canada, Spain, and the UK By Gordon H. Hanson
  6. Institutional Reactions to the Impact of Global Crisis at Source and Destination Cities of Migration in China By Maria Csanadi
  7. Social Identity and Inequality: The Impact of China's Hokou System By Farzana Afridi; Sherry Xin Li; Yufei Ren
  8. Globalization and Investment in Human Capital By Daniel C. Hickman; William W. Olney
  9. The impact of mega-sport events on tourist arrivals By Johan Fourie; María Santana-Gallego
  10. Do Worker Remittances Reduce Output Volatility in Developing Countries? By Ralph Chami; Dalia Hakura; Peter Montiel
  11. Workers' Remittances and the Equilibrium Real Exchange Rate: Theory and Evidence By Adolfo Barajas; Ralph Chami; Dalia Hakura; Peter Montiel
  12. Remittances and Institutions: Are Remittances a Curse? By Yasser Abdih; Jihad Dagher; Peter Montiel

  1. By: Kronenberg, Kristin; Carree, Martin
    Abstract: This study identifies and evaluates determinants of employees’ job and residential mobility. It examines mobility of fulltime employees in selected sectors in 2003/2004, using register data provided by Statistics Netherlands. We estimate a multinomial model of job and residential change. The results illustrate that individuals decide upon changing jobs and/or relocating by taking into account the strength of their family- and job-related ties. We also find that the prevalence of internal versus external career opportunities impedes job changes. While a high salary facilitates relocation, our findings regarding the effect of salary on interfirm mobility were inconclusive. A long commuting distance encourages (simultaneous) job and housing mobility, while being situated in the municipality of a large city encourages employees to either change jobs, or to relocate.
    Keywords: Job mobility; residential mobility; regional migration; human capital
    JEL: J62 J61 J24 R23
    Date: 2010
  2. By: Pierre-Louis Vézina (IUHEID, The Graduate Institute of International and Development Studies, Geneva)
    Abstract: This paper uses an untapped dataset on Swiss immigration and a novel instrumental variable to test three channels through which migrants promote trade. The main finding is that migrant networks are an effective substitute for formal institutions in facilitating trade. The effect takes place entirely on the extensive margin, suggesting migrant networks may be reducing fixed entry costs characterized by corruption.
    Keywords: trade, migration, corruption
    Date: 2010–02
  3. By: José Vicente Blanes (Universidad Pablo de Olavide)
    Abstract: International trade can foster economic development. This paper examines the link between immigration from developing countries to OECD countries and their bilateral trade; it also explores some possible mechanism behind this link. It uses a gravity equation for trade augmented by an immigrant stock variable and a set of control variables. The immigrants’ variable enters the estimated equation in different ways depending on immigrants’ relevant characteristics both individual and non individual-specific. Results show that in developing countries there is a positive link between immigration and both exports and imports. We find evidence for the trade transaction cost channel but not for the preference one. We identify the social or ethnic network effect as the mechanism behind this link since immigrants related to business activities are the ones who have a positive effect on bilateral trade.
    Keywords: International Trade, Migration, Economic Development.
    JEL: F10 F22 O10
    Date: 2010–10
  4. By: Gianmarco I.P. Ottaviano; Giovanni Peri; Greg C. Wright
    Abstract: How many "American jobs" have U.S.-born workers lost due to immigration and offshoring? Or, alternatively, is it possible that immigration and offshoring, by promoting cost-savings and enhanced efficiency in firms, have spurred the creation of jobs for U.S. natives? We consider a multi-sector version of the Grossman and Rossi-Hansberg (2008) model with a continuum of tasks in each sector and we augment it to include immigrants with heterogeneous productivity in tasks. We use this model to jointly analyze the impact of a reduction in the costs of offshoring and of the costs of immigrating to the U.S. The model predicts that while cheaper offshoring reduces the share of natives among less skilled workers, cheaper immigration does not, but rather reduces the share of offshored jobs instead. Moreover, since both phenomena have a positive "cost-savings" effect they may leave unaffected, or even increase, total native employment of less skilled workers. Our model also predicts that offshoring will push natives toward jobs that are more intensive in communication-interactive skills and away from those that are manual and routine intensive. We test the predictions of the model on data for 58 U.S. manufacturing industries over the period 2000-2007 and find evidence in favor of a positive productivity effect such that immigration has a positive net effect on native employment while offshoring has no effect on it. We also find some evidence that offshoring has pushed natives toward more communication-intensive tasks while it has pushed immigrants away from them.
    JEL: F22 F23 J24 J61
    Date: 2010–10
  5. By: Gordon H. Hanson
    Abstract: We use census data for the US, Canada, Spain, and UK to estimate bilateral migration rates to these countries from 25 Latin American and Caribbean nations over the period 1980 to 2005. Latin American migration to the US is responsive to labor supply shocks, as predicted by earlier changes in birth cohort sizes, and labor demand shocks associated with balance of payments crises and natural disasters. Latin American migration to Canada, Spain, and the UK, in contrast, is largely insensitive to these shocks, responding only to civil and military conflict. The results are consistent with US immigration policy toward Latin America (which is relatively permissive toward illegal entry) being mediated by market forces and immigration policy in the other countries (which favor skilled workers and asylum seekers, among other groups) insulating them from labor market shocks in the region.
    JEL: F2 J61
    Date: 2010–10
  6. By: Maria Csanadi (Institute of Economics - Hungarian Academy of Sciences)
    Abstract: This paper relates on the impact of global crisis on China from a systemic point of view. In what ways external and internal adaptation pressures influenced the transformation of the party-state system in China? Did reactions have an impact on the transformation of political or economic system? The purpose of our small field research was to respond to this question by examining institutional reactions to crisis from late 2008 to late 2009. We have examined the common and disparate characteristics of institutional adaptation at prefecture level at sources and destination cities of migration. We have also tried to detect their common or different sensitivity to crisis analyzing the periods before, during and after the crisis. We shall reflect on the reasons of prevailing political stability despite sudden large unemployment, and substantial economic, social and political impact on the party-state system. The paper uses interviews in 13 prefectures and newspaper analysis of 16 prefectures from mid 2008 to the end of 2009 complemented by available relevant statistical data.
    Keywords: system transformation, global crisis, migration, economic policy reactions,prefectures
    JEL: F5 D78 R58 J08 E24
    Date: 2010–06
  7. By: Farzana Afridi; Sherry Xin Li; Yufei Ren
    Abstract: They conduct an experimental study to investigate the causal impact of social identity on individuals' response to economic incentives. They focus on China‟s decades old household registration system, or the hukou institution, which categorizes citizens into urban and rural residents, and favors the former over the latter in resource allocation. Their results indicate that making individuals' hukou status salient and public significantly reduces the performance of rural migrant students on an incentivized cognitive task by 10 percent. This leads to a leftward shift of their earnings distribution – the proportion of rural migrants below the 25th earnings percentile increases significantly by almost 19 percentage points. [Working Paper No. 190]
    Keywords: social identity, hukou, inequality, field experiment, China
    Date: 2010
  8. By: Daniel C. Hickman (University of Colorado at Boulder); William W. Olney (Williams College)
    Abstract: Workers are becoming increasingly concerned about the impact that globaliza- tion has on their domestic labor market. While existing research typically focuses on the effects on labor market outcomes such as wages and employment, we examine whether American workers respond to globalization by increasing their investment in human capital. Specifically, we measure the extent to which offshoring and immigra- tion affect enrollment at institutions of higher education. The results indicate that both offshoring and immigration increase enrollment at community colleges, particu- larly among older students. We conclude that workers in the U.S. are responding to offshoring and immigration by acquiring the skills necessary to compete in a global economy.
    Keywords: globalization, higher education, enrollment, offshoring, immigration
    JEL: F16 I2 J24
    Date: 2010–04
  9. By: Johan Fourie (Department of Economics, University of Stellenbosch); María Santana-Gallego (Department of Economics, La Laguna University, Spain)
    Abstract: While a mega-sport event is scheduled at least once every year somewhere in the world, these events are rare occurrences for the host cities and countries. The benefits of such events seem lucrative; the very fact that many countries bid to host these events suggests that the benefits – be they tangible or intangible – more often than not outweigh the costs. Using a standard gravity model of bilateral tourism flows between 200 countries from 1995 to 2006, this paper measures a very direct benefit of such mega-events: the increase in tourist arrivals to the host country. In general, results suggest that mega-events promote tourism but the gain varies depending on the type of mega-event, the participating countries, the host country’s level of development, and whether the event is held during the peak season or off season.
    Keywords: Sport mega-events, tourism, World Cup, Olympic Games, trade
    JEL: L83 F19
    Date: 2010
  10. By: Ralph Chami (International Monetary Fund); Dalia Hakura (International Monetary Fund); Peter Montiel (Williams College)
    Abstract: Remittance inflows have increased considerably in recent years and are large relative to the size of many recipient economies. The theoretical and empirical effects of remittance inflows on output growth volatility are, however, ambiguous. On the one hand, remittances have been a remarkably stable source of income, relative to other private and public flows, and they seem to be compensatory in nature, rising when the home country’s economy suffers a downturn. On the other hand, the labor supply effects induced by altruistic remittances could cause the output effects associated with technology shocks to be magnified. This paper finds robust evidence for a sample of 70 remittance-recipient countries, including 16 advanced economies and 54 developing countries that remittances have a negative effect on output growth volatility, thereby supporting the notion that remittance flows are a stabilizing influence on output.
    Keywords: Remittances, output volatility, developing countries
    JEL: D02 D64 F02 F22 F24
    Date: 2010–10
  11. By: Adolfo Barajas (International Monetary Fund); Ralph Chami (International Monetary Fund); Dalia Hakura (International Monetary Fund); Peter Montiel (Williams College)
    Abstract: This paper investigates the impact of workers’ remittances on equilibrium real exchange rates (ERER) in recipient economies. Using a small open economy model, it shows that standard “Dutch Disease” results of appreciation are substantially weakened or even overturned depending on: degree of openness, factor mobility between domestic sectors, and countercyclicality of remittances; the share of consumption in tradables; and the sensitivity of a country’s risk premium to remittance flows. Panel integration techniques on a large set of countries provide support for these analytical results, and show that ERER appreciation in response to sustained remittance flows tends to be quantitatively small.
    Keywords: Remittances, Real Exchange Rate, Dutch Disease
    JEL: F24 F31
    Date: 2010–09
  12. By: Yasser Abdih (International Monetary Fund; International Monetary Fund); Jihad Dagher (University of Southern California); Peter Montiel (Williams College)
    Abstract: This paper addresses the complex and overlooked relationship between the receipt of workers’ remittances and institutional quality in the recipient country. Using a simple model, we show how an increase in remittance inflows can lead to deterioration of institutional quality – specifically, to an increase in the share of funds diverted by the government for its own purposes. In a cross section of 111 countries we empirically verify this proposition and find that a higher ratio of remittances to GDP leads to lower indices of control of corruption, government effectiveness, and rule of law, even after controlling for potential reverse causality.
    Keywords: Remittances, Institutions, Corruption
    JEL: D02 D64 F02 F22 F24
    Date: 2010–07

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