nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2011‒10‒09
nineteen papers chosen by
Yuji Tamura
Australian National University

  1. Sustainable Migration Policies By Pierre M. Picard; Tim Worrall
  2. Tradable Immigration Quotas By Jesús Fernández-Huertas Moraga; Hillel Rapoport
  3. Do Foreign Experts Increase the Productivity of Domestic Firms? By Nikolaj Malchow-Møller; Jakob R. Munch; Jan Rose Skaksen
  4. Media Exposure and Internal Migration - Evidence from Indonesia By Lídia Farré; Francesco Fasani
  5. Migration and climate change. The Mexican case By Adolfo Albo; Juan Luis Ordaz Diaz
  6. Linguistic Distance and the Language Fluency of Immigrants By Ingo E. Isphording; Sebastian Otten
  7. Substitution Between Immigrants, Natives, and Skill Groups By George J. Borjas; Jeffrey Grogger; Gordon H. Hanson
  8. Immigration and Occupations in Europe By Francesco D'Amuri; Giovanni Peri
  9. Assimilating Immigrants: The Impact of an Integration Program By Matti Sarvimäki; Kari Hämäläinen
  10. Effects of Immigration on Intra-Industry Trade: A logit analysis By Horácio Faustino; Isabel Proença
  11. Migration and Education By Christian Dustmann; Albrecht Glitz
  12. Gender Differences in the Intergenerational Earnings Mobility of Second-Generation Migrants By Regina Flake
  13. New Zealand Research on the Economic Impacts of Immigration 2005-2010: Synthesis and Research Agenda By Rob Hodgson; Jacques Poot
  14. Migration Paradigm Shifts and Transformation of Migrant Communities: The Case of Dutch Kiwis By Suzan van der Pas; Jacques Poot
  15. International Migration, Imperfect Information and Brain Drain By Vianney Dequiedt; Yves Zenou
  16. Migration and Foreign Direct Investment: Education Matters By Masood Gheasi; Peter Nijkamp; Piet Rietveld
  17. International migration and local employment: analysis of self-selection and earnings in Tajikistan By Atamanov, Aziz; Berg, Marrit van den
  18. Openness to Trade, Migration and Foreign Direct Investments of the EU By Stanislav Cernosa
  19. Does Legalization of Prostitution Increase Human Trafficking? By Seo-Young Cho; Axel Dreher; Eric Neumayer

  1. By: Pierre M. Picard (Departement Economie, University of Luxembourg); Tim Worrall (Economics, School of Social Sciences, University of Manchester)
    Abstract: This paper considers whether countries might mutually agree a policy of open borders, allowing free movement of workers across countries. For the countries to agree, the short run costs must outweighed by the long term benefits that result from better labour market flexibility and income smoothing. We show that such policies are less likely to be adopted when workers are less risk averse workers and when countries trade more. More surprisingly, we find that some congestion costs can help. This reverses the conventional wisdom that congestion costs tend to inhibit free migration policies.
    Keywords: Migration; Self-enforcing mechanism; Repeated games.
    JEL: F22 J61 R23
    Date: 2011–09
  2. By: Jesús Fernández-Huertas Moraga (FEDEA and IAE (CSIC)); Hillel Rapoport (Center for International Development, Harvard University;Bar-Ilan University; and EQUIPPE, University of Lille)
    Abstract: International migration is maybe the single most effective way to alleviate poverty at a global level. When a given host country allows more immigrants in, this creates costs and benefits for that particular country as well as a positive externality for all those (individuals and governments) who care about world poverty. This implies that the existing international migration regime is inefficient as it fails to internalize such externality. In addition, host countries quite often restrict immigration due to its apparently unbearable social and political costs. However these costs are never measured and made comparable across countries. In this paper we first discuss theoretically how tradable immigration quotas (TIQs) can reveal information on such costs and, once coupled with a matching mechanism taking into account migrants' preferences, generate substantial welfare gains for all the parties involved. We then propose two potential applications: a market for the resettlement of international (e.g., climate change) refugees, and an extension of the US diversity lottery to a larger set of host countries and other immigration targets. Both applications are seen as possible precursors to a full implementation of a TIQs system.
    Keywords: immigration, immigration policy, tradable quotas, refugees, climate change, international public goods
    JEL: F22 F5 H87 I3 K33 O19
    Date: 2011–06
  3. By: Nikolaj Malchow-Møller (University of Southern Denmark and CEBR); Jakob R. Munch (University of Copenhagen and CEBR); Jan Rose Skaksen (Copenhagen Business School and CEBR)
    Abstract: While most countries welcome (and some even subsidise) high-skilled immigrants, there is very limited evidence of their importance for domestic firms. To guide our empirical analysis, we first set up a simple theoretical model to show how foreign experts may impact on the productivity and wages of domestic firms. Using matched worker-firm data from Denmark and a difference-in-differences matching approach, we then find that firms that hire foreign experts - defined as employees eligible for reduced taxation under the Danish "Tax scheme for foreign researchers and key employees" both become more productive (pay higher wages) and increase their exports of goods and services.
    Keywords: Foreign experts, export, immigrants, productivity, difference-in-differences matching
    JEL: F22 J24 J31 J61 L2
    Date: 2011–09
  4. By: Lídia Farré (IAE-CSIC, IZA and Barcelona GSE); Francesco Fasani (IAE-CSIC, Barcelona GSE, MOVE-INSIDE and CReAM)
    Abstract: This paper investigates the impact of television on internal migration in Indonesia. We exploit the differential introduction of private television throughout the country and the variation in signal reception due to topography to estimate the causal effect of media exposure. Our estimates reveal important long and short run effects. An increase of one standard deviation in the number of private TV channels received in the area of residence reduces future inter- provincial migration by 1.7-2.7 percentage points, and all migration (inter and intra- provincial) by 4-7.4 percentage points. Short run effects are slightly smaller, but still sizeable and statistically significant. We also show that respondents less exposed to private TV are more likely to consider themselves among the poorest groups of the society. As we discuss in a stylized model of migration choice under imperfect information, these findings are consistent with Indonesia citizens over-estimating the net gains from internal migration.
    Keywords: Information; Migration decisions; Television
    JEL: J61 L82 O15
    Date: 2011–09
  5. By: Adolfo Albo; Juan Luis Ordaz Diaz
    Abstract: The June 2009 issue of Migration Watch Mexico by the BBVA Bancomer Foundation and BBVA Research mentioned the importance of environmental phenomena as factors of population expulsion or attraction. Expulsion occurs when in the communities of origin the environment begins to be detrimental to the life of human beings; for example, when there is environmental degradation and new risk zones appear, or when land is limited. In turn, the environment is a population attraction factor when the ecological quality of the environment is better compared to the zones of origin, thereby motivating migration.
    Date: 2011–08
  6. By: Ingo E. Isphording; Sebastian Otten
    Abstract: We use a newly available measure of linguistic distance developed by the German Max Planck Institute for Evolutionary Anthropology to explain heterogeneity in language skills of immigrants. This measure is based on an automatical algorithm comparing pronunciation and vocabulary of language pairs. Using data from the German Socio- Economic Panel covering the period from 1997 to 2003, the linguistic distance measure is applied within a human capital framework of language acquisition. It is shown that linguistic distance is the most important determinant for host country language acquisition and that it explains a large fraction of language skill heterogeneity between immigrants. By lowering the effi ciency and imposing higher costs of language learning, the probability of reporting good language skills is decreasing by increasing linguistic distance.
    Keywords: Linguistic distance; language; immigrants; human capital
    JEL: F22 J15 J24 J40
    Date: 2011–08
  7. By: George J. Borjas; Jeffrey Grogger; Gordon H. Hanson
    Abstract: The wage impact of immigration depends crucially on the elasticity of substitution between similarly skilled immigrants and natives and the elasticity of substitution between high school dropouts and graduates. This paper revisits the estimation of these elasticities. The U.S. data indicate that equally skilled immigrants and natives are perfect substitutes. The value of the second elasticity depends on how one controls for changes in demand that have differentially affected high school dropouts and graduates. The groups are imperfect substitutes under standard trend assumptions, but even slight deviations from these assumptions can lead to an outright rejection of the CES framework.
    JEL: J61
    Date: 2011–09
  8. By: Francesco D'Amuri (Bank of Italy and ISER, University of Essex); Giovanni Peri (University of California, Davis and NBER)
    Abstract: In this paper we analyze the effect of immigrants on natives' job specialization in Western Europe. We test whether the inflow of immigrants changes employment rates or the chosen occupation of natives with similar education and age. We find no evidence of the first and strong evidence of the second: immigrants take more manual-routine type of occupations and push natives towards more abstract-complex jobs, for a given set of observable skills. We also find some evidence that this occupation reallocation is larger in countries with more flexible labor laws. As abstract-complex tasks pay a premium over manual-routine ones, we can evaluate the positive effect of such reallocation on the wages of native workers. Accounting for the total change in Complex/Non Complex task supply from natives and immigrants we find that immigration does not change much the relative compensation of the two types of tasks but it promotes the specialization of natives into the first type.
    Keywords: immigration, task specialization, European labor markets
    JEL: J24 J31 J61
    Date: 2010–10
  9. By: Matti Sarvimäki (Aalto University School of Economics, Government Institute for Economic Research and London School of Economics); Kari Hämäläinen (Government Institute for Economic Research)
    Abstract: Immigration policy design is an important and controversial topic in most developed countries. We inform this debate by evaluating the effects of an integration program for immigrants to Finland. The program consists of an individualized sequence of training and subsidized employment. Non-compliance is sanctioned by reductions in welfare benefits. Our empirical strategy exploits a discontinuity that made participation obligatory in May 1999 only for those who had entered the population register after May 1997. The results suggest that the program strongly increased the employment and earnings of immigrants and reduced their dependency on social benefits.
    Keywords: Immigrants, assimilation, integration programs, regression-discontinuity
    JEL: J61 J68 H53 I38
    Date: 2011–09
  10. By: Horácio Faustino; Isabel Proença
    Abstract: This study estimates the effects of the immigration stock, as well as those of immigrants’ characteristics, such as having the same language as that of the host country and the level of qualification or entrepreneurship, on Portuguese intra-industry trade (IIT) by types, controlling for the effects of other socio-economic factors, like economic dimensions, price indexes and distance. In addition to the member-countries of the EU-27, the group of countries studied includes five African countries with Portuguese as their official language, known as the PALOPs, and the BRIC countries. Since indexes are fractional variables, the pseudo-likelihood Logit estimator was used on the panel data to obtain the empirical results. The study found that an increase of the immigrant stock will produce an increment in the trade indexes considered and this effect is enhanced if immigrants originate from a country where Portuguese is the official language, or if they are highly qualified, whereas immigrant entrepreneurs have no significant effect.
    Keywords: Immigration; trade; skills; entrepreneurship; panel data; Portugal. Classification-C33, F11, F12, F22.
    Date: 2011–09
  11. By: Christian Dustmann (CReAM, University College London); Albrecht Glitz (CReAM, Universitat Pompeu Fabra)
    Abstract: Sjaastad (1962) viewed migration in the same way as education: as an investment in the human agent. Migration and education are decisions that are indeed intertwined in many dimensions. Education and skill acquisition play an important role at many stages of an individual's migration. Differential returns to skills in origin- and destination country are a main driver of migration. The economic success of the immigrant in the destination country is to a large extent determined by her educational background, how transferable these skills are to the host country labour market, and how much she invests into further skills after arrival. The desire to acquire skills in the host country that have a high return in the country of origin may also be an important reason for a migration. From an intertemporal point of view, the possibility of a later migration may also affect educational decisions in the home country long before a migration is realised. In addition, the decisions of migrants regarding their own educational investment, and their expectations about future migration plans may also affect the educational attainment of their children. But migration and education are not only related for those who migrate or their descendants. Migrations of some individuals may have consequences for educational decisions of those who do not migrate, both in the home and in the host country. By easing credit constraints through remittances, migration of some may help others to go to school. By changing the skill base of the receiving country, migration may change incentives to invest in certain types of human capital. Migrants and their children may create externalities that influence educational outcomes of non-migrants in the destination country. This chapter will discuss some of the key areas that connect migration and education.
    Keywords: Migration, Education, Human Capital, Return Migration, Immigrant Selection, Second-generation
    Date: 2011–02
  12. By: Regina Flake
    Abstract: This study analyzes gender diff erences in the intergenerational earnings mobility of second-generation migrants in Germany. The analysis takes into account potential infl uences like assortative mating in the form of ethnic marriages and the parental integration measured by parents’ years since migration. First, intergenerational earnings elasticities are estimated at the mean and along the earnings distribution. The results do not reveal large diff erences in the intergenerational mobility – neither between natives and migrants nor between men and women. Second, intergenerational changes in the relative earnings position are analyzed. The results show that migrants are less likely than natives to worsen their relative earnings position while they have the same probability as natives to improve their earnings position. In summary, migrants are mostly as (im)mobile as the native population.
    Keywords: International migration; second-generation migrants; intergenerational mobility; marriage
    JEL: F22 J12 J30 J62
    Date: 2011–09
  13. By: Rob Hodgson (Department of Labour); Jacques Poot (University of Waikato)
    Abstract: This paper brings together the key research findings of some 20 projects conducted in New Zealand on the economic impacts of immigration from 2005 to 2010. Besides providing a synthesis of this research, knowledge gaps that could be addressed in future research are also identified. The report concludes that immigration has made a positive contribution to economic outcomes in New Zealand and that fears for negative economic impacts such as net fiscal costs, lower wages, and increasing unemployment find very little support in the available empirical evidence. Moreover, the economic integration of immigrants is broadly successful. Once migrants are in New Zealand for more than 10-15 years, their labour market outcomes are predominantly determined by the same success factors as those for the New Zealand born. Migration increases trade and tourism, both inbound and outbound. The net fiscal impact of immigration is positive. Findings on impacts on housing and on technological change are less conclusive. Simulations over a 15-year period with a CGE model suggest that even without additional technological change, additional immigration raises gross domestic product (GDP) per capita, albeit only modestly. Conversely, without net immigration, GDP per capita would be less. The CGE model simulations also suggest that changes in immigration policy and changes in the New Zealand economy over the last quarter century now yield greater economic benefits from immigration than in the past. Future research should focus on: the path of adjustment of the economy over time, following a change in the level of immigration; physical and human capital investment in the economy triggered by immigration; the economic consequences of greater diversity; and differences in impacts between temporary and long-term migration.
    Keywords: Migration, institutions, democracy, diaspora effects, brain drain
    JEL: O1 F22
    Date: 2011–01
  14. By: Suzan van der Pas (VU University Medical Center, EMGO Institute - LASA); Jacques Poot (National Institute of Demographic and Economic Analysis, University of Waikato)
    Abstract: This paper explores the dynamics of Dutch community change in New Zealand since 1950. The Netherlands has been the largest source country of migrants from continental Europe to New Zealand, but by 2006 40 percent of the Netherlands born were aged 65 or older. We find that there are three distinct cohorts of these migrants, each covering roughly 20 years of arrivals: a large cohort of post-war migrants (those who arrived in the 1950s and 1960s), and much smaller cohorts of skilled migrants (those who arrived in the 1970s and 1980s), and transnational professionals (those who arrived in the 1990s or more recently). Early migrants were mostly younger arrival, more religious, less educated and had more children than the subsequent cohorts. More recent migrants are increasingly highly qualified and in high-skill occupations. "Dutch Kiwis" are more geographically dispersed than other immigrants, and more recent arrivals are relatively more often located in rural areas. This transformation of the Dutch community in New Zealand can be linked to global and New Zealand/Netherlands specific changes that have conditioned the character and volume of the migrant flows and the dynamics of migrant community development.
    Keywords: globalisation, push and pull factors of migration, ageing of migrant communities, migrant integration, cohort analysis
    JEL: F22 J61 Z13
    Date: 2011–06
  15. By: Vianney Dequiedt (Universite d'Auvergne); Yves Zenou (Stockholm University, IFN, and CEPR)
    Abstract: We consider a model of international migration where skills of workers are imperfectly observed by firms in the host country and where information asymmetries are more severe for immigrants than for natives. There are two stages. In the first one, workers in the South decide whether to move and pay the migration costs. These costs are assumed to be sunk. In the second stage, firms offer wages to the immigrant and native workers who are in the country. Because of imperfect information, firms statistically discriminate high-skilled migrants by paying them at their expected productivity. The decision of whether to migrate or not depends on the proportion of high-skilled workers among the migrants. The migration game exhibits strategic complementarities, which, because of standard coordination problems, lead to multiple equilibria. We characterize them and examine how international migration affects the income of individuals in sending and receiving countries, and of migrants themselves. We also analyze under which conditions there is positive or negative self-selection of migrants.
    Keywords: asymmetric information, screening, self-selection of migrants, skill-biased migration, wage differentials
    JEL: D82 J61 F22 O12
    Date: 2011–06
  16. By: Masood Gheasi (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam); Piet Rietveld (VU University Amsterdam)
    Abstract: The rapid growth in the foreign-born population in many high and middle-income countries in recent decades has prompted much research on the socio-economic determinants and impacts of immigration. This paper investigates the relationship between the stock of foreign population by nationality living in the UK and the bilateral volume of foreign direct investment (FDI), both inward FDI into the UK and outward FDI from the UK. This study contributes to the literature on the above-mentioned association between migration and FDI, by using the UK annual data from 2001 to 2007 for 22 countries on the inward volume of FDI and for 27 countries on the outward volume of FDI. Our study finds a significant and positive relationship between migration and outward FDI. This result also holds, if we correct for endogeneity by using an instrumental variable approach. If we then include the education level of migrants living in the UK, our results indicate that the more educ ated migrants from a certain country are, the stronger positive effect they have on FDI in both directions (inward and outward).
    Keywords: foreign direct investment; immigration; gravity model; instrumental variable
    JEL: F22 P45
    Date: 2011–09–27
  17. By: Atamanov, Aziz (Maastricht Graduate School of Governance, Maastricht University); Berg, Marrit van den (Wageningen University, The Netherlands)
    Abstract: This paper addresses the issue of self-selection of individuals in international labour migration, non-agricultural and agricultural employment in Tajikistan and its link to earnings from these activities. Unlike most empirical studies, we could attribute selection bias on unobservable characteristics to the allocation of individuals to alternative employment sectors and analyse its impact on earnings abroad and at home. We have found positive selection in migration against local non-agricultural activities and positive selection in local non-agricultural activities against local agricultural activities. This indicates that the most capable individuals with regards to unobservable characteristics choose to migrate, while the somewhat less able choose non-agricultural activities, and individuals with the worst capabilities stay in poorly-paid agricultural activities. Controlling for self-selection, labour income returns to education of migrants and individuals in non-agricultural activities are slightly lower than those from Ordinary Least Squares (OLS).
    Keywords: international migration, self-selection, earnings, Tajikistan
    JEL: J24 J31 F22 O15
    Date: 2011
  18. By: Stanislav Cernosa
    Abstract: This paper analyses openness to trade, migration and foreign direct investment (FDI) using panel data. The focus is on the relationship between 15 EU countries (EU 15) as destination countries, and 71 trading partner countries which send migrants and receive FDI outflows, where only those predictions are introduced in the extended gravity model which are based on demographic trends of the partner countries and their geographical locations. The results confirm that a unified model successfully explains differences in openness to trade, migration and FDI between the EU 15 and the 12 new EU member countries, candidate countries, and developing countries.
    Keywords: International trade, migration, foreign direct investment, gravity model
    Date: 2011–09–30
  19. By: Seo-Young Cho (Georg-August-University Göttingen); Axel Dreher (Heidelberg University); Eric Neumayer (London School of Economics and Political Science)
    Abstract: This paper investigates the impact of legalized prostitution on human trafficking inflows. According to economic theory, there are two opposing effects of unknown magnitude. The scale effect of legalizing prostitution leads to an expansion of the prostitution market, increasing human trafficking, while the substitution effect reduces demand for trafficked women as legal prostitutes are favored over trafficked ones. Our empirical analysis for a cross-section of up to 150 countries shows that the scale effect dominates the substitution effect. On average, the legalization of prostitution increases human trafficking inflows.
    Keywords: human trafficking; prostitution
    JEL: O15 F22 K42
    Date: 2011–09–29

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