nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2011‒02‒26
twenty-two papers chosen by
Yuji Tamura
Australian National University

  1. The Costs and Benefits of Korean Unification By Marcus Noland; Sherman Robinson; Li-Gang Liu
  2. Preparing for Success in Canada and the United States: The Determinants of Educational Attainment Among the Children of Immigrants By Picot, Garnett; Hou, Feng
  3. The Labor Market Value to Legal Status By Lozano, Fernando A.; Sorensen, Todd
  4. Dialects, Cultural Identity, and Economic Exchange By Falck, Oliver; Heblich, Stephan; Lameli, Alfred; Südekum, Jens
  5. Spatial versus Social Mismatch: The Strength of Weak Ties By Zenou, Yves
  6. Immigrants-natives complementarities in production: evidence from Italy By Agnese Romiti
  7. Asymmetric Information in the Labor Market, Immigrants and Contract Menu By Kar, Saibal; Saha, Bibhas Chandra
  8. Emigration and Democracy By Docquier, Frédéric; Lodigiani, Elisabetta; Rapoport, Hillel; Schiff, Maurice
  9. The Effect of Immigration on the School Performance of Natives: Cross Country Evidence Using PISA Test Scores By Brunello, Giorgio; Rocco, Lorenzo
  10. Immigrant Welfare Receipt across Europe By Barrett, Alan; Maitre, Bertrand
  11. Savings, Asset Holdings, and Temporary Migration By Dustmann, Christian; Mestres, Josep
  12. The Wage Effects of Immigration and Emigration By Frederic DOCQUIER; Çaglar OZDEN; Giovanni PERI
  13. The Threat Effect of Participation in Active Labor Market Programs on Job Search Behavior of Migrants in Germany By Bergemann, Annette; Caliendo, Marco; van den Berg, Gerard J.; Zimmermann, Klaus F.
  14. Beaches, Sunshine, and Public-Sector Pay: Theory and Evidence on Amenities and Rent Extraction by Government Workers By Jan K. Brueckner; David Neumark
  15. Happiness and Financial Satisfaction in Israel. Effects of Religiosity , Ethnicity, and War By Bernard M.S. van Praag; Dmitri Romanov; Ada Ferrer-i-Carbonell
  16. The Returns to the Brain Drain and Brain Circulation in Sub-Saharan Africa: Some Computations Using Data from Ghana By Yaw Nyarko
  17. Immigrants and Welfare Receipt in Ireland By Barrett, Alan; Joyce, Corona; Maitre, Bertrand
  18. Should We Track Migrant Households When Collecting Household Panel Data?:Household Relocation, Economic Mobility and Attrition Biases in the Rural Philippines By Fuwa, Nobuhiko
  19. Relative Concerns of Rural-to-Urban Migrants in China By Akay, Alpaslan; Bargain, Olivier; Zimmermann, Klaus F.
  20. Migration und Integration: Deutschland als Einwanderungsland - "... denn ihr seid selbst Fremde in Ägypten gewesen" By Zimmermann, Klaus F.
  21. Determinants of Remittances:Evidence from Tonga By Huidan Lin
  22. Medida gradiente de mobilidade regional By Rodrigo Peñaloza; Herton Ellery Araújo

  1. By: Marcus Noland (Peterson Institute for International Economics); Sherman Robinson (Peterson Institute for International Economics); Li-Gang Liu (Peterson Institute for International Economics)
    Abstract: Existing estimates of the costs of unification are inadequate for a number of reasons. In this paper we use a dynamic computable general equilibrium model to calculate South Korean and total peninsular income streams under a variety of unification (and non-unification) scenarios. We find that there is a scenario in which the present discounted value of South Korean income is higher with unification than without it. Although lower income groups in South Korea experience reduced incomes under this scenario, with redistribution of the gains, everyone can be made better off. Indeed, this scenario, which involves relatively low levels of South Korean private investment in the North together with relatively high levels of North-South migration, is also the one which generates the highest level of total peninsular income as well. The latter point is critical in that it suggests that there is no necessary conflict between the economic interests of North and South Koreans after unification.
    Date: 2010–12
  2. By: Picot, Garnett; Hou, Feng
    Abstract: This paper reviews the recent research on the determinants of the educational attainment among the children of immigrants born in Canada and the United States, also known as the second generation. The focus is on the gap in educational attainment between the second and third-and-higher generations (the children of domestic-born parents), as well as the intergenerational transmission of education between immigrants and their children. On average, the children of immigrants have educational levels significantly above those of their counterparts in Canada with Canadian-born parents. In the U.S., educational levels are roughly the same between these two groups. In both countries, conditional on the educational attainment of the parents and location of residence, the children of immigrants attain higher levels of education than the third-and-higher generations. Parental education and residential location are major determinants of the numerically positive gap in educational attainment between the children of immigrants and the children of Canadian-born or American-born parents. However, even after accounting for these and other demographic background variables, much of the positive gap between the second generation and the third-and-higher generations remains in Canada. In Canada, parental education is less important as a determinant of educational attainment for the children in immigrant families than for those with Canadian-born parents. Less educated immigrant parents are more likely to see their children attain higher levels of education than are their Canadian-born counterparts. Outcomes vary significantly by ethnic/source region group in both countries. In the U.S., some second-generation ethnic/source region groups, such as those with Mexican, Puerto Rican and other Central/South American backgrounds, have relatively low levels of education (unadjusted data with no controls). However, conditional on background characteristics, these second-generation
    Keywords: Education, training and learning, Children and youth, Ethnic diversity and immigration, Educational attainment, Immigrant children and youth, Ethnic groups and generations in Canada, Outcomes of education
    Date: 2011–02–15
  3. By: Lozano, Fernando A. (Pomona College); Sorensen, Todd (University of California, Riverside)
    Abstract: We present estimates of the effect of legal immigration status on earnings of undocumented workers. Our contribution to the literature centers on a two-step procedure that allows us to first estimate the legal status of an immigrant and then estimate the effect of the Immigration Reform and Control Act (IRCA) on immigrants’ labor market outcomes using a triple difference approach. From a sample of young to middle aged Mexican men, our results show that IRCA causes a 20 log point increase in labor market earnings of Mexican immigrants over the long run, and that nearly all of this increase is in the occupational wage. These results suggest that the primary disadvantage for undocumented workers is the type of jobs that they are able to obtain. We estimate the model for immigrants from other countries not benefiting from IRCA to the extent that Mexican immigrants did, and find no systematic bias towards positive and significant results.
    Keywords: immigration, legal status, immigration reform
    JEL: J08 F22
    Date: 2011–02
  4. By: Falck, Oliver; Heblich, Stephan; Lameli, Alfred; Südekum, Jens
    Abstract: We study the effect of cultural ties on economic exchange using a novel measure for cultural identity: dialect similarity across regions of the same country. We evaluate linguistic micro-data from a unique language survey conducted between 1879 and 1888 in about 45,000 German schools. The recorded geography of dialects comprehensively portrays local cultural ties that have been evolving for centuries, and provides an ideal opportunity to measure cul-tural barriers to economic exchange. In a gravity analysis, we then show that cross-regional migration flows in the period 2000-2006 are positively affected by historical dialect similari-ty. Using different empirical strategies, we show that this finding indicates highly time-persistent cultural borders that impede economic exchange even at a fine geographical scale.
    Keywords: Germany; Gravity; Internal migration; Culture; Language; Dialects
    Date: 2011–01
  5. By: Zenou, Yves (Stockholm University)
    Abstract: The aim of this paper is to provide a new mechanism based on social interactions explaining why distance to jobs can have a negative impact on workers' labor-market outcomes, especially ethnic minorities. Building on Granovetter's idea that weak ties are superior to strong ties for providing support in getting a job, we develop a model in which workers who live far away from jobs tend to have less connections to weak ties. Because of the lack of good public transportation in the US, it is costly (both in terms of time and money) to commute to business centers to meet other types of people who can provide other sources of information about jobs. If distant minority workers mainly rely on their strong ties, who are more likely to be unemployed, there is then little chance of escaping unemployment. It is therefore the separation in both the social and physical space that prevents ethnic minorities from finding a job.
    Keywords: weak ties, labor market, social networks, land rent
    JEL: A14 J15 R14 Z13
    Date: 2011–02
  6. By: Agnese Romiti (CeRP - Collegio Carlo Alberto)
    Abstract: This paper studies the impact of immigration on the Italian labor market using administrative data on Italian private-sector employees during the period 1987-2004. The analysis adopts a structural model based on a three level CES production function extending the model in Card (2001) in order to allow for imperfect substitution both between immigrants and natives within the same area-skill cell, and between females and males within the same area-skill-immigration status cell. The endogeneity of labor supply is controlled for by using an instrument based on the past immigrants' settlement as in Card (2001). The results, robust to the offsetting role of natives out-migration, provide evidence of a small but detectable degree of imperfect substitution between immigrants and natives, whereas female and male workers turn out to be perfect substitutes. Despite immigrants not having any effect on natives' employment, the simulation based on the estimated parameters suggests that a flow of low-skilled immigrants reduces mostly the wages of similarly skilled immigrants (-3.5%), and to a lesser extent those of natives (-1%).
    Date: 2011–02
  7. By: Kar, Saibal (Centre for Studies in Social Sciences, Calcutta); Saha, Bibhas Chandra (University of East Anglia)
    Abstract: Immigrant workers and their labor force participation in host countries have received critical attention in all concerned disciplines, principally owing to its strong implications for well-being of natives. The ageing population in many rich countries and several related and unrelated issues including global integration, pension provisions or security threats keeps immigration under continuous impact evaluation. However, of the several studies that dealt with patterns and consequences aspects of labor migration, only a handful discusses asymmetric information across transnational labor markets despite agreement that a standardized screening mechanism is unavailable. At the same time, several empirical studies show that immigrants are proportionally overrepresented in self-employment, vis-à-vis natives of equivalent skill levels. We try to explain this phenomenon based on asymmetric information in the host country labor market. We focus on the design of a contract menu by the employers, which when offered to a mixed cohort of immigrants facilitates self-selection in favor of paid employment or the outside option of self-employment/entrepreneurship. We also discuss countervailing incentives among the mixed cohort.
    Keywords: immigrants, asymmetric information, labor contracts, self-employment, incentive compatibility
    JEL: D82 J23 J24 J41 J61
    Date: 2011–02
  8. By: Docquier, Frédéric (Université catholique de Louvain); Lodigiani, Elisabetta (University of Luxembourg); Rapoport, Hillel (Bar-Ilan University); Schiff, Maurice (World Bank)
    Abstract: Migration is an important and yet neglected determinant of institutions. The paper documents the channels through which emigration affects home country institutions and considers dynamic-panel regressions for a large sample of developing countries. We find that emigration and human capital both increase democracy and economic freedom. This implies that unskilled (skilled) emigration has a positive (ambiguous) impact on institutional quality. Simulations show an impact of skilled emigration that is generally positive, significant for a few countries in the short run and for many countries in the long run once incentive effects of emigration on human capital formation are accounted for.
    Keywords: migration, institutions, democracy, diaspora effects, brain drain
    JEL: O1 F22
    Date: 2011–02
  9. By: Brunello, Giorgio (University of Padova); Rocco, Lorenzo (University of Padova)
    Abstract: We study whether a higher share of immigrant pupils affects the school performance of natives using aggregate multi-country data from PISA. We find evidence of a negative and statistically significant relationship. The size of the estimated effect is small: doubling the share of immigrant pupils in secondary schools from its current sample average of 4.8 percent to close to 10 percent would reduce the test score of natives by 1.32 to 1.96 percent, depending on the selected group of natives. There is also evidence that – conditional on the average share of immigrant pupils – reducing the dispersion of this share between schools has small positive effects on the test scores of natives.
    Keywords: immigrants, school performance, natives
    JEL: J15 I28
    Date: 2011–02
  10. By: Barrett, Alan (ESRI, Dublin); Maitre, Bertrand (ESRI, Dublin)
    Abstract: The issue of welfare receipt by immigrants is highly controversial across Europe. In this paper, we assess whether immigrants are more likely to receive welfare payments relative to natives across a range of European countries. Using the European Union Survey on Income and Living Conditions for 2007, we find very little evidence that immigrants are indeed more likely to receive such payments when all payments are considered together. This is true whether we use raw data or regression analysis in which we control for relevant characteristics. We do find evidence of higher rates of poverty among immigrants. When combined with the results on welfare receipt, this raises a question over the effectiveness of welfare systems in protecting immigrants from poverty across Europe.
    Keywords: welfare, immigrants, Europe
    JEL: I38 J61
    Date: 2011–02
  11. By: Dustmann, Christian (University College London); Mestres, Josep (University College London)
    Abstract: This paper analyzes savings and asset holdings of immigrants in relation to their return plans. We argue that savings and asset accumulation may be affected by return plans of immigrants. Further, the way savings and assets are held in the home- and host country may also be related to future return plans. Thus, comparing savings and assets between immigrants and natives may lead to serious underestimation when neglecting the home country component. We show that immigrants with temporary return plans place a higher proportion of their savings in the home country. In addition, both the magnitude and the share of assets and housing value accumulated in the home country are larger for immigrants who consider their migration as temporary, and lower the value of assets and property held in the host country. Finally, and conditional on observable characteristics, we find no evidence that immigrants with temporary migration plans save more than immigrants with permanent migration plans.
    Keywords: international migration, wealth accumulation, housing demand
    JEL: F22 D31 R21
    Date: 2011–02
  12. By: Frederic DOCQUIER (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and FNRS); Çaglar OZDEN (The World Bank, Development Research Group); Giovanni PERI (University of California, Davis)
    Abstract: In this paper, we simulate the long-run effects of migrant flows on wages of high-skilled and low-skilled non-migrants in a set of countries using an aggregate representation of national economies. We focus on Europe and compare the outcomes for large Western European countries with those of other key destination countries both in the OECD and outside the OECD. Our analysis builds on an improved database of bilateral stocks and net migration flows of immigrants and emigrants by education level for the years 1990 through 2000. We find that all European countries experienced a decrease in their average wages and a worsening of their wage inequality because of emigration. Whereas, immigration had nearly equal but opposite effects. These patterns hold true using a range of parameters for our simulations, accounting for the estimates of undocumented immigrants, and correcting for the quality of schooling and/or labor-market downgrading of skills. In terms of economic outcomes, it follows that prevalent public fears in European countries are misplaced; immigration has had a positive average wage effect on native workers. These concerns would be more properly focused on the wage effect of emigration.
    Keywords: Immigration, Emigration, Complementarity, Schooling Externalities, Average Wage, Wage inequality
    JEL: F22 J61 J31
    Date: 2010–12–14
  13. By: Bergemann, Annette (University of Mannheim); Caliendo, Marco (IZA); van den Berg, Gerard J. (University of Mannheim); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: Labor market programs may affect unemployed individuals' behavior before they enroll. Such ex ante effects may differ according to ethnic origin. We apply a novel method that relates self-reported perceived treatment rates and job search behavioral outcomes, such as the reservation wage or search intensity, to each other. We compare German native workers with migrants with a Turkish origin or Central and Eastern European (including Russian) background. Job search theory is used to derive theoretical predictions. We examine the omnibus ex ante effect of the German ALMP system, using the novel IZA Evaluation Data Set, which includes self-reported assessments of the variables of interest as well as an unusually detailed amount of information on behavior, attitudes and past outcomes. We find that the ex ante threat effect on the reservation wage and search effort varies considerably among the groups considered.
    Keywords: immigrants, policy evaluation, reservation wage, search effort, expectations, unemployment duration, program evaluation, active labor market policy
    JEL: J64 J61 C21 D83 D84
    Date: 2011–02
  14. By: Jan K. Brueckner; David Neumark
    Abstract: The absence of a competitive market and the presence and strength of public-sector labor unions make it likely that public-sector pay reflects an element of rent extraction by government workers. In this paper, we test a specific hypothesis that connects such rent extraction to the level of local amenities. Specifically, although migration of taxpayers limits the extent of rent-seeking, public-sector workers may be able to extract higher rents in regions where high amenities mute the migration response. We develop a theoretical model that predicts such a link between public-sector wage differentials and local amenities, and we test the model's predictions by analyzing variation in these wage differentials and amenities across states. The evidence reveals that public-sector wage differentials are, in fact, larger in the presence of high amenities, with the effect being stronger for unionized public-sector workers, who are likely better able to exercise political power in extracting rents.
    JEL: J45 J48 J61 R10
    Date: 2011–02
  15. By: Bernard M.S. van Praag (University of Amsterdam, IZA, CESifo, DIW); Dmitri Romanov (Central Bureau of Statistics, Jerusalem, Israel); Ada Ferrer-i-Carbonell (Institut d'Analisi Economica (IAE-CSIC), Barcelona, Spain and IZA)
    Abstract: We analyze individual satisfaction with life as a whole and satisfaction with the personal financial situation for Israeli citizens of Jewish and Arab descent. Our data set is the Israeli Social Survey (2006). We are especially interested in the impact of the religions Judaism, Islam and Christianity, where we are able to differentiate between individuals who vary in religiosity between secular and ultra-orthodox. We find a significant effect of religiosity on happiness. With respect to Jewish families it is most striking that the impact of family size on both life and financial satisfaction seems to vary with religiosity. This might be a reason for differentiation in family equivalence scales. For Arab families we did not find this effect. First-generation immigrants are less happy than second-generation immigrants, while there is no significant difference between second-generation families and native families. The effect of the Lebanon War is much less than expected.
    Keywords: Happiness; subjective well-being; financial satisfaction; Israel; religion; immigration; terrorism
    JEL: H56 I31 N35 N45 R23 Z12
    Date: 2010–09–16
  16. By: Yaw Nyarko
    Abstract: We look at the decision of the government or "central planner" in the allocation of scarce governmental resources for tertiary education, as well as that for the individual. We provide estimates of the net present values, or cost and benefits. These include costs of tertiary education; the benefits of improved skills of those who remain in the country; and also takes into account the flows of the skilled out of the country (the brain drain) as well as the remittances they bring into the country. Our results are positive for the net benefits relative to costs. Our results suggest that (i) there may be room for creative thinking about the possibility that the brain drain could provide mechanisms for dramatic increases in education levels within African nations; and (ii) by at least one metric, spending by African nations on higher education in this period yielded positive returns on the investment. Our results on the individual decision problem resolve a paradox in the returns to education literature which finds low returns to tertiary education.
    JEL: F35 F43 O0 O55
    Date: 2011–02
  17. By: Barrett, Alan (ESRI, Dublin); Joyce, Corona (ESRI, Dublin); Maitre, Bertrand (ESRI, Dublin)
    Abstract: Since 2004, Ireland has included in its system of social welfare payments criteria for receipt which limit the extent to which immigrants can receive welfare payments. In this paper, we compare the rates of receipt of welfare for immigrants and natives to see if the outcome is consistent with the operation of this policy. Using data from 2008, we generally find lower rates of welfare receipt among immigrants. While the numbers of immigrants claiming unemployment-related payments surged at the outset of the recession, there appears to have been a quicker stabilisation in the number of immigrants claiming such benefits relative to natives, based on official data from 2007 to 2010. This would be consistent with the on-going implementation of the type of criteria introduced in 2004.
    Keywords: Ireland, immigrants, welfare
    JEL: I38 J61
    Date: 2011–02
  18. By: Fuwa, Nobuhiko
    Abstract: Based on household panel data that tracked migrant households (with an additional survey cost of 17 percent), this article describes behavior of household relocation and quantifies the extent of attrition biases in estimating the determinants of percapita household consumption and of its growth rate. Many households relocate for non-economic reasons, and to rural destinations, while the small number of urban migrants improved their wellbeing faster than did others. Such heterogeneity among migrants may be a reason behind the negligible attrition biases caused by the omission of migrants, in the inference on the average behavioral coefficients among the original population.
    Keywords: domestic migration; household relocation; panel data analysis; Philippines; poverty dynamics; sample attrition; urbanization
    JEL: O15 C23 J61 C42 O12
    Date: 2010–09–18
  19. By: Akay, Alpaslan (IZA); Bargain, Olivier (University College Dublin); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: As their environment changes, migrants constitute an interesting group to study the effect of relative income on subjective well-being. This paper focuses on the huge population of rural-to-urban migrants in China. Using a novel dataset, we find that the well-being of migrants depends on several reference groups: it is negatively affected by the income of other migrants and workers of home regions; in contrast, we identify a positive, 'signal' effect vis-à-vis urban workers: larger urban incomes indicate higher income prospects for the migrants. These effects are particularly strong for migrants who wish to settle permanently, decline with years since migrations and change with other characteristics including work conditions and community ties.
    Keywords: China, relative concerns, well-being
    JEL: C90 D63
    Date: 2011–02
  20. By: Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: Deutschland ist ein Einwanderungsland. Dies sollte heute niemand mehr ernsthaft bestreiten. Dennoch bedarf es einiger Anstrengungen, die von vielen Seiten geforderte "Willkommenskultur" zu etablieren. Der vorliegende Beitrag gibt mit Bezug zu einem Bibelzitat Einblicke in den aktuellen Stand der Debatte. Vor dem Hintergrund der demografischen Herausforderungen, vor denen Deutschland zweifelsohne steht, wird ein Plädoyer für eine umfassende Strategie gehalten. So ist neben einer besseren Aktivierung inländischer Potenziale eine Kehrtwende in der deutschen Zuwanderungspolitik dringend erforderlich. Es wird insgesamt ein selbstbewusster und unaufgeregter Umgang mit den Themen Migration und Integration angeregt, zu dem Deutschland leider bislang nicht gefunden hat.
    Keywords: Migration, Integration, Zuwanderung, demografischer Wandel, ethnische Vielfalt
    JEL: F22 J21 J61
    Date: 2011–02
  21. By: Huidan Lin
    Abstract: This paper analyzes the determinants of remittances to Tonga. The results indicate that macroeconomic conditions in remitting countries and exchange rate fluctuations influence remittances. In particular, remittances growth falls when the Tongan currency appreciates, but increases with higher real GDP growth and lower unemployment in remitting countries. The analysis also finds that the influence of these determinants varies with the recipients of remittances, with remittances to non-profit organizations being more sensitive to an appreciation of the Tongan currency and the interest rate differential between Tonga and remitting countries than remittances to households. However, the analysis does not find evidence of "ÂDutch Disease" in Tonga, as the real exchange rate does not appear to be affected by remittances.
    Keywords: Capital flows , Consumption , Real effective exchange rates , Tonga , Workers remittances ,
    Date: 2011–01–26
  22. By: Rodrigo Peñaloza (Departamento de Economia (Department of Economics) Faculdade de Economia, Administração, Contabilidade e Ciência da Informação e Documentação (FACE) (Faculty of Economics, Administration, Accounting and Information Science) Universidade de Brasília); Herton Ellery Araújo (Instituto de Pesquisa Econômica e Aplicada (IPEA))
    Abstract: We propose a new measure of regional mobility: the gradient measure of mobility. Besides the extension, it also captures the overall intensity of migration and is comprised of the marginal impacts of each locality over the population distri- bution. We compare it with standard measures of mobility, such as the accounting measure and the Yasudas measure, and give some characterizations in terms of Hirschmann-Her…ndahl indexes.
    Keywords: Demography, measures of regional mobility.
    JEL: J10
    Date: 2011–01

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