nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2012‒02‒01
twelve papers chosen by
Yuji Tamura
Australian National University

  1. Preferences for Redistribution among Emigrants from a Welfare State By Ilpo Kauppinen; Panu Poutvaara
  2. Sale of Visas: A Smuggler’s Final Song? By Emmanuelle Auriol; Alice Mesnard
  3. Spending more is spending less: on the desirability of enforcing migration By Alessandra Casarico; Giovanni Facchini; Tommaso Frattini
  4. Extending the case for a beneficial brain drain By Simone Bertoli; Herbert Brücker
  5. Skill-biased technological change, unemployment and brain drain By Harald Fadinger; Karin Mayr
  6. Immigrant Economic Assimilation: Evidence from UK Longitudinal Data between 1978 and 2006 By Sara Lemos
  7. Remittances to Latin America and the Caribbean in 2010: Stabilization after the Crisis By René Maldonado; Natasha Bajuk; María Luisa Hayem
  8. Ethnic Concentration, Cultural Identity and Immigrant Self-Employment in Switzerland By G. Guerra; R. Patuelli; R. Maggi
  9. Mind the Gap: What Gap? A Detailed Picture of the Immigrant-Native Earnings Gap in the UK using Longitudinal Data between 1978 and 2006 By Sara Lemos
  10. Immigration and pension system in Portugal By Tânia Cristina Simões de Matos dos Santos; Inmaculada Domínguez Fabián
  11. Ethnic Networks and Employment Outcomes By Eleonora Patacchini; Yves Zenou
  12. The macroeconomic consequences of migration diversion: evidence for Germany and the UK By Timo Baas; Herbert Brücker

  1. By: Ilpo Kauppinen (Ifo Institute); Panu Poutvaara (University of Munich and Ifo Institute)
    Abstract: This paper studies attitudes towards income redistribution in the country of origin among those who stay in a welfare state, and those who emigrate. We find a striking gender difference among Danish emigrants. Majority of men opposes increasing income redistribution, while majority of women supports it. Women are somewhat more positive towards redistribution also in Denmark, but the gender difference is much smaller. We study to what extent differences in attitudes towards redistribution are driven by beliefs about the determinants of individual success, generalized trust, assimilation to the new home country, and self-selection of emigrants to the United States and other destinations. We do not find evidence of assimilation to political values prevalent in the new home country.
    Keywords: Migration; Emigration; Welfare state; Redistribution; Political preferences
    JEL: F22 J61 H2
    Date: 2012–01
  2. By: Emmanuelle Auriol (Toulouse School of Economics (ARQADE and IDEI) and CEPR); Alice Mesnard (City University, Institute for Fiscal Studies and CEPR)
    Abstract: We study how smugglers respond to different types of migration policies - legalisation through the sale of migration visas, or more traditional repressive policies through borders’enforcement, employers’sanctions or deportation - by changing the price they propose to illegal migrants. In this context a government that aims at dismantling smugglers and controlling migration flows faces a trade-off. Dismantling smugglers by the sale of visas increases the flows of migrants and may worsen their skill composition. In contrast, repressive policies decrease the flows of illegal migrants and may improve their skill composition but reinforce the smugglers’ abusive power as they apply higher prices. We then study the conditions under which a budget-neutral combination of both types of measures may be effective at dismantling smugglers’ businesses and controlling migration flows. Simulations allow us to quantify the partial equilibrium effects of the different policies under study.
    Keywords: migration, migration policies, market structure.
    JEL: F22 I18 L51 O15
    Date: 2012–01
  3. By: Alessandra Casarico (Universita Bocconi, CES-Ifo, Econpubblica and LdA); Giovanni Facchini (Erasmus University Rotterdam, Universita degli Studi di Milano, CEPR, CES-Ifo, CReAM, IZA and LdA); Tommaso Frattini (Universita' degli Studi di Milano, CReAM, IZA, and LdA)
    Abstract: We study the migration policy set by a welfare maximizing government in a model where immigrant workers differ in their skills and are imperfectly matched with heterogenous occupations. The policy fixes a minimum skill level for legal migrants, and foreign workers that fall below it can only enter the country illegally. We start by analyzing under which conditions an amnesty is desirable compared to tolerating undocumented immigrants. Next, we study when it is preferable to have ex-ante lax enforcement, rather than to carry out costly enforcement. We show that three channels play an important role in this decision: an amnesty is more likely the larger are the output gains brought about by the legalization, the less redistributive is the welfare state and the higher is the expected cost of criminal activities carried out by illegal immigrants. Importantly, we also find that, when an amnesty is desirable, the destination country would reach an even higher welfare level investing in enforcement ex-ante. Empirical evidence based on a novel panel dataset of legalization programs carried out by a group of OECD countries between 1980-2007 broadly supports the role played by the channels identified in our theoretical model.
    Keywords: Illegal immigration, Immigration Policy, Amnesties.
    JEL: F22 J61
    Date: 2012–01
  4. By: Simone Bertoli (University of Florence and IAB (Institute for Employment Research)); Herbert Brücker (University of Bamberg and IAB (Institute for Employment Research))
    Abstract: The recent literature about the so-called beneficial brain drain assumes that destination countries are characterized not only by higher wages than the source country, but also by a higher or at least not lower relative return to education. However, it is a well known stylized fact that the returns to education are higher in rich than in poor countries. Against this background, we assess whether the main prediction of this literature, namely the possibility of a beneficial brain gain, still holds under the reverse assumption. We show that there is a still a strong case for a beneficial brain drain, even if the returns to education in the source country exceed those in the destination country. Immigration policies that are biased against unskilled workers are not necessary for a beneficial brain drain to occur once one considers that agents face heterogeneous migration costs.
    Keywords: migration; brain drain; skill premium; heterogeneous agents; selective immigration policies
    JEL: F22 J24 O15
    Date: 2012–01
  5. By: Harald Fadinger (University of Vienna); Karin Mayr (University of Vienna)
    Abstract: We develop a general equilibrium model of technological change and migration to examine the effects of a change in skill endowments on wages, employment rates and emigration rates of skilled and unskilled workers. We find that, depending on the elasticity of substitution between skilled and unskilled workers, an increase in the skill ratio can increase the expected wage of the skilled and decrease the brain drain. We provide empirical estimates and simulations to support our findings and show that effects are empirically relevant and potentially sizeable. Our findings fit the stylized facts on educational upgrading in developing countries during the 1980s and the subsequent decrease in the brain drain from those countries during the 1990s.
    Keywords: Technological Change, Skill Premia, Unemployment, Brain Drain.
    JEL: F22 J61 J64 O33
    Date: 2012–01
  6. By: Sara Lemos
    Abstract: We exploit a large and long longitudinal dataset to estimate the immigrant-native earnings gap at entry and over time for the UK between 1978 and 2006. That is, we attempt to separately estimate cohort and assimilation effects. We also estimate the associated immigrant earnings growth rate and immigrant-native earnings convergence rate. Our estimates suggest that immigrants from more recent cohorts fare better than earlier ones at entry. Furthermore, the earnings of immigrants from more recent cohorts catch up faster with natives' earnings. While the convergence took over 30 years for those entering in the post-war, it only took half as long for those entering in the early 2000s. This earnings growth is fastest in the first 10 years, and it considerably slows down after 30 years.
    Keywords: Immigration; assimilation; wages; earnings; earnings-gap; UK.
    JEL: J24 J31 J61 J71 J82 F22
    Date: 2011–09
  7. By: René Maldonado; Natasha Bajuk; María Luisa Hayem
    Abstract: This paper deals with remittance trends in Latin America and the Caribbean, including statistics and indicators. In 2010, remittance flows to Latin America and the Caribbean marked the end of the downward trend brought on by the 2008-2009 global financial and economic crisis. The overall regional volume of remittances sent home reached levels similar to the previous year with a slight increase of 0.2%. However, higher inflation rates and stronger local currencies in many countries resulted in an -8.7% drop in the value of these remittances, once received.
    Keywords: Financial Sector :: Financial Services, Financial Sector :: Remittances, Economics :: Financial Crises & Economic Stabilization, Labor :: Workforce & Employment, Social Development :: Migration & Migrants, cash flows, remittance sending countries
    Date: 2011–03
  8. By: G. Guerra; R. Patuelli; R. Maggi
    Abstract: Immigrant self-employment rates vary considerably across regions in Switzerland. Business ownership provides an alternative to wage labour, where immigrants have to face structural barriers such as the limited knowledge of the local language, or difficulties in fruitfully making use of their own human capital. Despite their historically high unemployment rates with respect to natives, immigrants in Switzerland are less entrepreneurial. It is therefore important to uncover factors that may facilitate the transition from the status of immigrant to the one of economic agent. Among others factors, concentration in ethnic enclaves, as well as accumulated labour market experience and time elapsed since immigration, have been associated to higher business ownership rates. In this paper, we use a cross-section of 2,490 Swiss municipalities in order to investigate the role played by the ethnic concentration of immigrants, as well as cultural factors, in determining self-employment rates.
    JEL: C21 J24 J61 O15 R23
    Date: 2012–01
  9. By: Sara Lemos
    Abstract: Using the underexplored, sizeable and long Lifetime Labour Market Database (LLMDB) we estimated the immigrant-native earnings gap across the entire earnings distribution, across continents of nationality and across cohorts of arrival in the UK between 1978 and 2006. We exploited the longitudinal nature of our data to separate the effect of observed and unobserved individual characteristics on earnings. This helped us to prevent selectivity biases such as cohort bias and survivor bias, which have been long standing unresolved identification issues in the literature. In keeping with the limited existing UK literature, we found a clear and wide dividing line between whites and non-whites in simple comparable models. However, in our more complete models we found a much narrower and subtler dividing line. This confirms the importance of accounting for unobservable individual characteristics, which is an important contribution of this paper. It also suggests that the labour market primarily rewards individual characteristics other than immigration status. We also found that the lowest paid immigrants, whom are disproportionately non-white, suffer an earnings penalty in the labour market, whereas higher paid immigrants, whom are disproportionately white, do not. Finally, we found less favourable earning gaps for cohorts that witnessed proportionately larger non-white and lower paid white immigration.
    Keywords: Immigration; wages; earnings; earnings-gap; UK
    JEL: J24 J31 J61 J71 J82 F22
    Date: 2011–09
  10. By: Tânia Cristina Simões de Matos dos Santos (Instituto Politécnico de Leiria); Inmaculada Domínguez Fabián (Universidad de Extremadura)
    Abstract: The Portuguese Pension System is submitted to two risks. Over the period 2005-2050, a decrease of the workforce and an increase of old-age persons are eminent, which provide a doubling of the dependency rate. So, the system is not financially sustainable in the medium and long terms and it is expected that the system will enter in a growing deficit in 2015, when expenditures will overcome the revenues. Hence, the system is subject to a demographic risk (associated with the reduction of the fertility rates, the augmentation of the life expectancy and the increase of the dependency rate) and to a financial insolvency risk (motivated by the lack of equatorial correspondence between expenditures and revenues). Immigration could be a solution to the unsustainability of the pension systems. This paper examines the role of the immigration on resolving these two risks. We investigate, based on the European Economy (2006) projections about the impact of ageing on the public expenditure for the period 2005-50, the required immigrant flows that maintain the old-age dependency rate observed in 2004, and we calculate also the number of immigrants required to promote a null financial result for the Portuguese Pension System. We conclude that the number of immigrants that guarantees a null financial result is much lower than one that eliminates the demographic risk. Compared with the European Economy forecasts (2006), the number of immigrants required to guarantee the solvency of the Portuguese pension system is substantially higher and show an upward trend during the period under review contrary to the expected trend announced by that European entity.
    Keywords: Portuguese Pension System, immigration, dependency rate, demographic risk, financial insolvency risk, ageing population
    JEL: M0 M1
    Date: 2012–01–20
  11. By: Eleonora Patacchini (Universita  di Roma "La Sapienza", EIEF and CEPR); Yves Zenou (Stockholm University)
    Abstract: This paper explores the relationship between residential proximity of individuals from the same ethnic group and the probability of finding a job through social networks, relative to other search methods. Using individual-level data from the UK Labour Force survey and spatial statistics techniques, we find that (i) the higher is the percentage of a given ethnic group living nearby, the higher is the probability of finding a job through social contacts; (ii) this effect decays very rapidly with distance. The magnitude, statistical significance and spatial decay of such an effect differ depending on the ethnic group considered. We provide an interpretation of our findings using the network model of Calvó-Armengol and Jackson (2004).
    Keywords: Ethnic minorities, population density, social interactions, weak and strong ties,spatial statistics.
    JEL: A14 C21 J15 R12 R23
    Date: 2012–01
  12. By: Timo Baas (Institute for Employment Research (IAB) and Free University of Berlin); Herbert Brücker (University of Bamberg, Institute for Employment Research (IAB) and IZA)
    Abstract: This paper examines the macroeconomic consequences of the diversion of migration flows away from Germany towards the UK in the course of the EU’s Eastern Enlargement. The EU has agreed transitional periods for the free movement of workers with the new member states from Central and Eastern Europe. The selective application of migration restrictions during the transitional periods has resulted in a reversal of the pre-enlargement allocation of migration flows from the new member states across the EU. Based on a forecast of the migration potential under the conditions of free movement and of the transitional arrangements, we employ a CGE model with imperfect labour markets to analyse the macroeconomic effects of this diversion process. We find that EU Eastern enlargement has increased in the GDP per capita in the UK substantially, but that the diversion of migration flows towards the UK has reduced wage gains and the decline in unemployment there. The effects of the EU Eastern enlargement are less favourable for Germany, but the diversion of migration flows has protected workers there against a detrimental impact on wages and unemployment.
    Keywords: EU Eastern enlargement, international migration, computable equilibrium model, wage-setting.
    JEL: F15 F22 C68 J61 J30
    Date: 2012–01

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