nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2011‒07‒21
seven papers chosen by
Yuji Tamura
Australian National University

  1. Dissecting Network Externalities in International Migration By Michel BEINE; Frédéric DOCQUIER; Caglar ÖZDEN
  2. The internal relocation premium: are migrants positively or negatively selected? Evidence from Italy. By Andrea Cutillo; Claudio Ceccarelli
  3. Heterogeneity in the Cultural Expenditures of Municipalities. Evidence from Italian Data (1998-2006) By Domenico Depalo; Silvia Fedeli
  4. Exporting Poor Health: The Irish in England By Liam Delaney; Alan Fernihough; James P. Smith
  5. Rainfall, Financial Development, and Remittances: Evidence from Sub-Saharan Africa By Rabah Arezki; Markus Bruckner
  6. Are Foreign Aid and Remittances a Hedge against Food Price Shocks in Developing Countries? By Mireille NTSAMA ETOUNDI; Jean-Louis COMBES; Christian EBEKE; Thierry YOGO
  7. Remittance Flows and Economic Growth in Mexico: A Single Break Unit Root and Cointegration Analysis, 1970-2009 By Miguel Ramirez

  1. By: Michel BEINE (University of Luxembourg, Luxembourg, and CES-Ifo, Germany); Frédéric DOCQUIER (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and FNRS); Caglar ÖZDEN (World Bank, Development Research Group, United States)
    Abstract: Existing migrant networks play an important role in explaining the size and structure of immigration flows. They affect the net benefits of migration by reducing assimilation costs (’self-selection channel’) and by lowering legal entry barriers through family reunification programs (’immigration policy channel’). This paper presents an identification strategy allowing to disentangle the relative importance of these two channels. Then, it provides an empirical analysis based on US immigration data by metropolitan area and country of origin. First, we show that the overall network externality is strong: the elasticity of migration flows to network size is around one. Second, only a quarter of this elasticity is accounted for by the policy channel. Third, the policy channel was stronger in the 1990s than in the 1980s as the family reunification programs became more effective with growing diasporas. Fourth, the overall diaspora effect and the policy channel are more important for low-skilled migrants.
    Keywords: Migration, network/diaspora externalities, Immigration policy
    JEL: F22 O15
    Date: 2011–06–16
  2. By: Andrea Cutillo; Claudio Ceccarelli
    Abstract: This paper analyzes the wage returns from internal migration for recent graduates in Italy. We employ a switching regression model that accounts for the endogeneity of the individual’s choice to relocate to get a job after graduation: the omission of this selection decision can lead to biased estimates, as there is potential correlation between earnings and unobserved traits exerting an influence on the decision to migrate. The empirical results sustain the appropriateness of the estimation technique and show that there is a significant pay gap between migrants and non-migrants; migrants seem to be positively selected and the migration premium is downward biased through OLS estimates. The endogeneity of migration shows up both as a negative intercept effect and as a positive slope effect, the second being larger then the first: bad knowledge of the local labor market and financial constraints lead migrants to accept a low basic wage but, due to relevant returns to their characteristics, they finally obtain an higher wage then the others.
    Keywords: internal relocation; endogeneity; pay gap; migration premium.
    JEL: J31 J61 R23
    Date: 2010–10
  3. By: Domenico Depalo; Silvia Fedeli
    Abstract: On the basis of a unique dataset referring to all 8,100 Italian municipalities and providing details of their balance-sheets, local governments’ features, socio-demographic and economic indicators, we analyze the determinants of the local cultural expenditures. We exploit the panel nature of the data to explain observable and unobservable heterogeneity. Other than the traditional determinants, we find that per capita cultural expenditures increase with the population size, but decrease with the share of men over total population; immigrants increase local cultural spending only in the long run. The number of years in power of the municipal council also plays a role.
    Keywords: Local public expenditure, cultural expenditure, immigrants, local government choice, Mundlak correction.
    JEL: H72 Z10 C23
    Date: 2011–02
  4. By: Liam Delaney (Geary Institute and School of Economics, University College Dublin,); Alan Fernihough (Geary Institute and School of Economics, University College Dublin); James P. Smith (Rand Corporation)
    Abstract: The Irish-born population in England is in worse health than both the native population and the Irish population in Ireland, a reversal of the commonly observed healthy migrant effect. Recent birth-cohorts living in England and born in Ireland, however, are healthier than the English population. The substantial Irish health penalty arises principally for cohorts born between 1920 and 1960. This paper attempts to understand the processes that generated this migrant health pattern. Our results suggest a strong role for early childhood conditions and economic selection in driving the dynamics of health differences between the Irish-born migrants and White English populations.
    Date: 2011–07–12
  5. By: Rabah Arezki; Markus Bruckner
    Abstract: We use annual variation in rainfall to examine the effects that exogenous, transitory income shocks have on remittances in a panel of 42 Sub-Saharan African countries during the period 1960-2007. Our main finding is that these income shocks have a significant positive effect on remittances, but that the effect is significantly decreasing in the share of domestic credit to GDP. So much so, that at high levels of credit to GDP transitory increases in income had a significant negative effect on remittances. Our findings are consistent with the view that remittances take advantage of unexploited domestic investment opportunities that can exist due to domestic credit market frictions. Our findings also support the view that when barriers to financial flows are low, remittances effectively provide insurance against transitory income shocks.
    Date: 2011–07–05
  6. By: Mireille NTSAMA ETOUNDI; Jean-Louis COMBES (Centre d'Etudes et de Recherches sur le Développement International); Christian EBEKE; Thierry YOGO
    Abstract: This paper measures the effects of food price shocks on both the level of household consumption per capita and the instability of the household consumption per capita growth rate in developing countries. In this vein, the paper explores specifically the role of aid and remittance inflows in the mitigation of the effects of food price shocks in the recipient economies. Using a large sample of developing countries observed over the period 1980 – 2009 and mobilizing dynamic panel data specifications, the econometric results yield three important findings. First, food price shocks significantly affect both the level and the instability of household consumption in the highly vulnerable countries. Second, remittance and aid inflows significantly dampen the effect of food price shocks in the most vulnerable countries. Third, a lower remittance-to-GDP ratio is required to fully absorb the effects of the food price shocks compared to the corresponding aid-to-GDP ratio.
    Keywords: Household consumption, food price shocks, vulnerability, Aid, Remittances
    Date: 2011
  7. By: Miguel Ramirez (Department of Economics, Trinity College)
    Abstract: This paper gives an overview of remittance flows to Mexico during the 1980-2009 period in absolute terms, relative to GDP, in comparison to FDI inflows, and in terms of their regional destination. Next, the paper reviews the growing literature that assesses the impact of remittances on investment spending and economic growth. Third, it develops a simple endogenous growth model that explicitly incorporates the potential impact of remittance flows on economic and labor productivity growth. Fourth it presents an empirical counterpart to the conceptual model and, using single-break unit root and cointegration analysis, proceeds to determine the impact of changes in these flows on economic growth and labor productivity growth over the 1970-2009 period. The error-correction model estimates suggest that remittance flows to Mexico, along with other relevant variables, have a positive and significant effect on both economic growth and labor productivity growth. The concluding section summarizes the major results and discusses potential avenues for future research on this important topic.
    Keywords: Error-correction model, FDI inflows, Johansen Cointegration test, labor productivity growth, remittance flows, Theil inequality coefficient, Zivot-Andrews single-break unit root analysis
    JEL: C22 F24 O4 O15 O54
    Date: 2011–07

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