nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2014‒05‒17
24 papers chosen by
Yuji Tamura
La Trobe University

  1. Geographical labour mobility in the context of the crisis - European Commission By Dawn Holland
  2. Labor Mobility WIthin Currency Unions By Emmanuel Farhi; Iván Werning
  3. Migrant Networks and Trade: The Vietnamese Boat People as a Natural Experiment By Christopher PARSONS; Pierre-Louis VÉZINA
  4. Employment of Undocumented Immigrants and the Prospect of Legal Status: Evidence from an Amnesty Program By Carlo Devillanova; Francesco Fasani; Tommaso Frattini
  5. Minimum Wages and the Integration of Refugee Immigrants By Lundborg, Per; Skedinger, Per
  6. Immigrant's access to social housing: perception and reality By Alan Manning; Diego Battiston; Richard Dickens; Jonathan Wadsworth
  7. Migration and productivity: employers’ practices, public attitudes and statistical evidence By Dr Cinzia Rienzo; Jonathan Portes; Dr Heather Rolfe
  8. Transfer Arrangement, Labor Migration and Community Welfare By Yamada, Daichi
  9. The Long Term Economic Impacts of Reducing Migration: the Case of the UK Migration Policy By Dr Miguel Sanchez-Martinez; Dr Katerina Lisenkova
  10. Wage differentials between natives and cross-border workers within and across establishments By BROSIUS Jacques; RAY Jean-Claude; VERHEYDEN Bertrand; WILLIAMS Donald R.
  11. Migrant diversity, migration motivations and early integration: the case of Poles in Germany, the Netherlands, London and Dublin By Renee Luthra; Lucinda Platt & Justyna Salamonska
  12. International Migration of Skilled Workers with Endogenous Policies By Slobodan Djajić; Michael S. Michael
  13. Skill Mismatch and Migration in Egypt and Tunisia By Anda David; Christophe Nordman
  14. Potential impacts on the UK of future migration from Bulgaria and Romania By Dr Tatiana Fic; Dr Heather Rolfe
  15. The migration network effect on international trade By Rodolfo Metulini; Paolo Sgrignoli; Stefano Schiavo; Massimo Riccaboni
  16. Short-term migration and consumption expenditure of households in rural India By S. Chandrasekhar; Mousumi Das; Ajay Sharma
  17. Can education bridge the gap? Education and the employment position of immigrants in Belgium By Vincent Corluy; Gerlinde Verbist
  18. Wage differentials between native, immigrant and cross-border workers: Evidence and model comparisons By VAN KERM Philippe; YU Seunghee; CHOE Chung
  19. The Economic and Labour Market Impacts of Tier 1 entrepreneur and investor migrants By Dr Max Nathan; Dr Heather Rolfe
  20. Declining Migration within the U.S.: The Role of the Labor Market By Raven Molloy; Christopher L. Smith; Abigail Wozniak
  21. Firms and the Economics of Skilled Immigration By Sari Pekkala Kerr; William R. Kerr; William F. Lincoln
  22. The Impact of Financial Constraints and Wealth Inequality on International Trade Flows, Capital Movements and Entrepreneurial Migration By Spiros Bougheas; Rod Falvey
  23. Foreign workers and the wage distribution: Where do they fit in? By CHOE Chung; VAN KERM Philippe
  24. The Rationale of the Migrant Share as a Wage Determinant:Theory and Evidence By Lundborg, Per

  1. By: Dawn Holland
    Abstract: �- EThe widening economic asymmetries within the European Union have called into question the ability of labour mobility to act as a shock absorber within the EU. While free movement of workers within the EU was established more than 40 years ago, the rate of mobility within the EU has remained relatively low compared to other free mobility regions such as the US, Canada and Australia.�While emigration from the Periphery has increased significantly since 2008, in absolute terms the level of mobility flows from this region remains extremely limited.
    Date: 2013–07
  2. By: Emmanuel Farhi; Iván Werning
    Abstract: We study the effects of labor mobility within a currency union suffering from nominal rigidities. When the demand shortfall in depressed region is mostly internal, migration may not help regional macroeconomic adjustment. When external demand is also at the root of the problem, migration out of depressed regions may produce a positive spillover for stayers. We consider a planning problem and compare its solution to the equilibrium. We find that the equilibrium is generally constrained inefficient, although the welfare losses may be small if the economy suffers mainly from internal demand imbalances.
    JEL: E0 F0
    Date: 2014–05
  3. By: Christopher PARSONS (University of Oxford); Pierre-Louis VÉZINA (University of Oxford)
    Abstract: We provide cogent evidence for the causal pro-trade effect of migrants and in doing so establish an important link between migrant networks and long-run economic development. To this end, we exploit a unique event in human history, the exodus of the Vietnamese Boat People to the US. This episode represents an ideal natural experiment as the large immigration shock, the first wave of which comprised refugees exogenously allocated across the US, occurred over a twentyyear period during which time the US imposed a complete trade embargo on Vietnam. Following the lifting of trade restrictions in 1994, the share of US exports going to Vietnam was higher and more diversified in those US States with larger Vietnamese populations, themselves the result of larger refugee inflows 20 years earlier.
    Keywords: : Migrant Networks, US Exports, Natural Experiment
    JEL: F14 F22
    Date: 2014–09
  4. By: Carlo Devillanova (University of Bocconi); Francesco Fasani (Queen Mary University); Tommaso Frattini (University of Milan)
    Abstract: This paper estimates the causal effect of the prospect of legal status on the employment outcomes of undocumented immigrants. Our identification strategy exploits a natural experiment provided by the 2002 amnesty program in Italy that introduced an exogenous discontinuity in eligibility based on date of arrival. We find that the prospect of legal status significantly increases the employment probability of immigrants that are potentially eligible for the amnesty relative to other undocumented immigrants. The size of the estimated effect is equivalent to about two thirds of the increase in employment that undocumented immigrants in our sample normally experience in their first year after arrival in Italy. These findings are robust to several falsification exercises.
    Keywords: Illegal immigration, Natural experiment, Legalization
    JEL: F22 J61
    Date: 2014–04
  5. By: Lundborg, Per (Swedish Institute of Social Research (SOFI)); Skedinger, Per (Research Institute of Industrial Economics (IFN))
    Abstract: This paper is the first to estimate the effects of minimum wages on the unemployment of refugee immigrants. The collectively agreed minimum wages raise both the incidence of unemployment and days in unemployment considerably for male refugees in Sweden; different estimation methods and models yield robust elasticities in the 1.8–2.0 range. The effects for young natives are about half as large. There are heterogeneous effects with regard to country of origin and time of residence in Sweden for both male and female refugees. We account for spatial trends – a concern in some of the recent literature – as well as industrial trends. It turns out that only the latter affect our results.
    Keywords: Minimum; Wages; and; the; Integration; of; Refugee; Immigrants
    JEL: J23 J61 J64
    Date: 2014–04–08
  6. By: Alan Manning; Diego Battiston; Richard Dickens; Jonathan Wadsworth
    Abstract: Although most UK immigrants are likely to be eligible to apply for social housing, there is no evidence that they have preferential access - if anything the reverse seems to have been the case. But it does seem that there is less discrimination against immigrants and ethnic minorities now than in the past and this removal of discrimination, coupled with a failure to increase the social housing stock, has reduced the availability of social housing for UK native households. According to research by Professor Alan Manning, this is probably the source of the feeling among some white people that social landlords actively discriminate against them in favour of immigrants and ethnic minorities. They are probably right to think that the part of the population attracted to social housing has been neglected, but they are wrong to think that this neglect applies just to them and not to immigrants as well.
    Keywords: Immigration, social housing
    JEL: F22 R21 H75
    Date: 2014–05
  7. By: Dr Cinzia Rienzo; Jonathan Portes; Dr Heather Rolfe
    Abstract: The debate about the economic impacts of migration has focused on the short-run impacts on labour markets, public service and public finances. These have taken centre stage in recent Government announcements and debates about social impacts, fuelled by perceptions of public opinion on migration. The report is aimed at moving the spotlight away from short-term impacts on the employment of natives and on to the longer-term connection between migration and productivity. In doing so it fills a gap in knowledge about the impact of migration on the UK economy, labour markets and workplaces. We have collected new evidence on migration, through interviews with employers and the general public; we have examined existing evidence and we have analysed quantitative data on migration and productivity in new ways.
    Date: 2013–11
  8. By: Yamada, Daichi
    Abstract: An informal transfer arrangement within a community redistributes incomes. While this may improve the welfare by mitigating the income inequality, it will also a ect households’ decisions on labor migration, a way to expand incomes. This paper theoretically examines the transfer arrangement that maximize the community welfare, taking into account its e ect on endogenous labor migration decisions. The result shows that the welfare is maximized when the redistribution through transfer is limited. It also presents an alternative explanation for empirical findings of limited transfer arrangement.
    Keywords: Informal transfer, Labor migration,
    Date: 2014–05
  9. By: Dr Miguel Sanchez-Martinez; Dr Katerina Lisenkova
    Abstract: This paper uses an OLG-CGE model for the UK to illustrate the long-term effect of migration on the economy. We use the current Conservative Party migration target to reduce net migration “from hundreds of thousands to tens of thousands†as an illustration. Achieving this target would require reducing recent net migration numbers by a factor of about 2. In presented simulations, we compare a baseline scenario, which incorporates the principal 2010-based ONS population projections, with a lower migration scenario, which assumes that net migration is reduced by around 50%. The results show that such a significant reduction in net migration has strong negative effects on the economy. The level of both GDP and GDP per person fall during the simulation period by 11.0% and 2.7% respectively. Moreover, this policy has a significant impact on public finances. To keep the government budget balanced, the labour income tax rate has to be increased by 2.2 percentage points in the lower migration scenario.
    Date: 2013–12
  10. By: BROSIUS Jacques; RAY Jean-Claude; VERHEYDEN Bertrand; WILLIAMS Donald R.
    Abstract: Luxembourg has a very unusual labor market, with only 29% of Luxembourgish nationals. The remaining workforce is composed of immigrants (27%) and cross- border workers (44%) who live in one of the three surrounding countries which are France, Germany and Belgium. Research on economic outcomes of immigrants has been a major focus of labor market research in many countries, but the cross-border population has only attracted scarce attention. Even though this topic is of limited relevance in most countries at the national level, similar situations as in Luxembourg can be found in regional and local labor markets in most other countries, around ma- jor cities for example. In this paper we use the example of Luxembourg to investi- gate the determinants of the wage gap between natives and cross-border workers. We first analyze whether this specific commuting workforce is concerned, like the non na- tional population in many other labor markets, by segregation into low-wage firms. We then use a matched employer-employee dataset to investigate the role that firm-specific characteristics play in determining the wage gap. This approach opens interesting per- spectives for expanding the literature on the native-immigrants wage gap.
    Keywords: wage gap; cross-border labor market; segregation; multilevel modeling
    JEL: J31 J61 J71 R23
    Date: 2014–05
  11. By: Renee Luthra; Lucinda Platt & Justyna Salamonska
    Abstract: The expansion of the European Union eastwards in 2004, with an ensuing massive increase in East-West migration from the accession countries has been represented as a new migration system of a kind unique in recent migration history, with its specific features of rights of movement and low mobility and information costs accompanying persistent East-West wage differentials. In principle, it provides an ideal context in which to develop understandings of the ‘new migration’ reflecting complex motivations and migration trajectories as well as chain migration and transnational lives. Despite a rapid expansion of research in this area, new insights into the complexities of mixed migration motivations and migrant heterogeneity have tended to be focused on country-specific qualitative studies.In this paper we utilise a unique, four-country data source covering over 3,500 Poles migrating to Germany, the Netherlands, London and Dublin in 2009-2010, to enable the quantitative characterization of the new migration. Exploiting information on pre-migration experience as well as expressed migration motivations and post-migration structural, subjective and social measures of integration in the receiving country, we conduct a three-stage analysis. First we employ latent class analysis to allocate the migrants to six migrant types. Second, we link these migrant types to pre-migration characteristics and estimate multinomial logit models for class membership. Third, controlling for these pre-migration characteristics we are able to explore how the migrant types are associated with measures of integration.We reveal substantial heterogeneity among migrants and some evolving ‘new’ migrant types alongside more traditional labour migrants. We show how these types are associated with differences in pre-migration human capital, region of origin and employment experience and with post-migration social and subjective integration in receiving societies.
    Date: 2014–05–02
  12. By: Slobodan Djajić; Michael S. Michael (IHEID, The Graduate Institute of International and Development Studies, Geneva)
    Abstract: We study the interaction between the optimal immigration policy of a host country and education policy of a source country in a model of international migration of skilled workers. Acquisition of human capital is driven by the academic and career opportunities at home and abroad. Greater opportunities to migrate are found to increase the source country's net stock of human capital only under very stringent conditions concerning the shape of the utility function and of the production function for human capital, the country's emigration rate, and the international wage dierential. We use the model to examine the eects of technological improvements in the educational sector, changes in the academic curricula in the source country, and attitudes to immigration in the host country. Of key interest are the implications for the optimal spending on education in the source country and the optimal immigration quota of the host country.
    Keywords: Migration of skilled workers, immigration policy, education policy
    JEL: F22 J24 O15
    Date: 2014–05–09
  13. By: Anda David (PSL, Université Paris Dauphine, LEDa, IRD, UMR DIAL); Christophe Nordman (IRD, UMR 225 DIAL, PSL, Université Paris Dauphine, LEDa)
    Abstract: (english) The objective of this paper is to shed light on the issue of skill mismatch in the context of return migration in Egypt and Tunisia. Using data on both return and potential migrants in Egypt and Tunisia, we analyze the skills that migrants acquire before and during migration and the way these skills are used upon return. We find evidence of skill mismatch, especially in Tunisia. The undereducation phenomenon is more prevalent among return migrants, indicating that they make up for their lower education using their migration experience. Finally, we estimate the determinants of skill mismatch on the Egyptian and Tunisian labour markets and find a significant negative effect of return migration on the probability of being undereducated. _________________________________ (français) L'objectif de cet article est d’apporter un éclairage sur la question de l'inadéquation des qualifications dans le cadre de la migration de retour en Egypte et en Tunisie. En utilisant à la fois des données sur les migrants de retour et sur les migrants potentiels en Egypte et en Tunisie, nous analysons les qualifications que les migrants acquièrent avant et pendant la période de migration et la façon dont ces compétences sont utilisées à leur retour. Nos résultats confirment l’existence d’un fort degré d'inadéquation des qualifications, en particulier en Tunisie. Le phénomène de la sous-éducation est plus présent pour les migrants de retour, indiquant qu'ils compensent leur faible niveau d'éducation en utilisant leur expérience migratoire. Enfin, nous examinons les déterminants de l'inadéquation des qualifications sur les marchés du travail égyptien et tunisien et trouvons en effet une corrélation négative et significative de la migration de retour sur la probabilité d'être sous-éduqué.
    Keywords: Return migration, skill mismatch, labor market, education, Tunisia and Egypt, Migration de retour, inadéquation des qualifications, marché du travail, éducation, Tunisie et Egypte.
    JEL: J24 F22 O15 I25
    Date: 2014–04
  14. By: Dr Tatiana Fic; Dr Heather Rolfe
    Abstract: This report was commissioned to provide evidence from which the UK Government can assess the potential impacts of migration from EU2 countries following the lifting of transitional controls at the end of 2013. To assess potential impact, we look at migration from Bulgaria and Romania and at patterns and characteristics of migrants, within the EU and currently to the UK. We examine the factors which may affect the scale and direction of EU2 migration after 2013. We then explore the potential impact of any further migration from the EU2 countries on services within the UK.
    Date: 2013–04
  15. By: Rodolfo Metulini (IMT Lucca Institute for Advanced Studies); Paolo Sgrignoli (IMT Lucca Institute for Advanced Studies); Stefano Schiavo (Department of Economics and Management, University of Trento); Massimo Riccaboni (IMT Lucca Institute for Advanced Studies)
    Abstract: This paper studies the relationship between migration and trade, with the aim of measuring both direct and indirect network effects. We analyze trade of diferentiated and homogeneous goods using an econometric approach inspired by spatial econometrics, proposing a new way to define country neighbors based on the most intense links in the migration network. We find that migration significantly affects trade across categories both in direct and in indirect way. The indirect impact highlights a stronger competitive effect of third country migrants for homogeneous goods. We also confirm that the effect of migration channels is higher on differentiated goods.
    Keywords: Trade; Migration; Gravity model; Spatial econometrics, Networks
    JEL: F14 F22 C21
    Date: 2014–05
  16. By: S. Chandrasekhar (Indira Gandhi Institute of Development Research); Mousumi Das (Indira Gandhi Institute of Development Research); Ajay Sharma (Indira Gandhi Institute of Development Research)
    Abstract: In 2007-08, short-term migrants constituted 4.35 per cent of the rural workforce. A total of 9.25 million households in rural India had short-term migrants.Using a nationally representative data for rural India, this paper examines differences in consumption expenditure across households with and without a household member who is a short-migrant. We use an instrumental variable approach to control for the presence of a short-term migrant in a household. We find that households with a short-term migrant have lower monthly per capita consumption expenditure and monthly per capita food expenditure compared to households without a short-term migrant. Short-term migrants are not unionised, they work in the unorganised sector, they do not have written job contracts and state governments are yet to ensure that the legislations protecting them are properly enforced. This could be one of the reasons why we do not observe higher levels of expenditure in households with such migrants.
    Keywords: Short-term migration, Household consumption, Rural-urban linkages
    JEL: O1 R23
    Date: 2014–03
  17. By: Vincent Corluy; Gerlinde Verbist
    Abstract: The employment rates of non-EU immigrants compared to natives in Belgium continue to be low. In this chapter we examine whether differences in educational attainments offer an adequate explanation for these persisting labour market disadvantages. We decompose the gap in labour market outcomes between immigrants and natives, using the Blinder-Oaxaca decomposition method. The decomposition shows that for EU born immigrants three quarters of the gap can be attributed to differences in the observed, socio-economic characteristics between the two populations. For non-EU born immigrants, the differences in observed characteristics with natives can account for around one third of the gap. Although the explanatory power of our model remains limited for this group, substantial increases in the effect of observed characteristics are found over the last fifteen years. A detailed decomposition shows that lower educational levels, larger families and diverse regional settlement can, at least partly, explain the lower labour market attachment of non-EU born immigrants. Over the period in focus, the impact of differences in educational level between immigrants and natives has significantly grown, indicating a declining socio-economic profile of more recent immigrants as compared with natives.
    Keywords: Employment rate gap, education, immigrants, Belgium
    JEL: I32 J21 J68
    Date: 2014–03
  18. By: VAN KERM Philippe; YU Seunghee; CHOE Chung
    Abstract: This paper exploits a parametric variant of the Machado-Mata simulation methodology to examine wage distribution differences between native and foreign workers in Luxembourg. Relying on ?parametric quantile regression? in place of repeated linear quantile regressions cuts computing time drastically with no loss in the accuracy of unconditional quantile simulations. Substantively, we find a clear inverted-U-shaped native worker advantage: the advantage is small (possibly negative) for both low and high quantiles, but it is large for the middle half of the quantile range (between the 20th and 70th native wage percentiles). The pattern holds against both immigrants and cross-border workers, although the latter catch up much less at high percentiles. Differences in human capital and job characteristics hardly account for the gap, unlike sorting into different jobs and occupations which account for a substantial share?although not all?of the gap.
    Keywords: immigrant wages; cross-border workers; quantile regression; quantile process; distribution regression; Singh.Maddala distribution; Dagum distribution; Luxembourg
    JEL: J15 J31 J61
    Date: 2014–05
  19. By: Dr Max Nathan; Dr Heather Rolfe
    Abstract: This report examines the economic impacts of entrepreneur and investor migrants who come to the UK through the Tier 1 route, introduced in 2008. The research for the report was commissioned by the Migration Advisory Committee (MAC) in February 2013. Tier 1 entrepreneur and investor migrants originate from outside of the European Economic Area (EEA) and the research therefore builds on previous research commissioned by MAC on the impact of migration on the UK. The research included a review of existing research both in the UK and internationally, an examination of UK datasets, and new qualitative evidence through case study interviews with Tier 1 entrepreneurs and investors. These findings are presented in Sections 1 - 3 of the report and are followed by conclusions and policy implications in Section 4.
    Date: 2013–06
  20. By: Raven Molloy; Christopher L. Smith; Abigail Wozniak
    Abstract: Interstate migration has decreased steadily since the 1980s. We show that this trend is not primarily related to demographic and socioeconomic factors, but instead appears to be connected to a concurrent secular decline in labor market transitions. We explore a number of reasons for the declines in geographic and labor market transitions, and find the strongest support for explanations related to a decrease in the net benefit to changing employers. Our preferred interpretation is that the distribution of relevant outside offers has shifted in a way that has made labor market transitions, and thus geographic transitions, less desirable to workers.
    JEL: J0 J11 J6 N3
    Date: 2014–04
  21. By: Sari Pekkala Kerr; William R. Kerr; William F. Lincoln
    Abstract: Firms play a central role in the selection, sponsorship, and employment of skilled immigrants entering the United States for work through programs like the H-1B visa. This role has not been widely recognized in the literature, and the data to better understand it have only recently become available. This chapter discusses the evidence that has been assembled to date in understanding the impact of high skilled immigration from the perspective of the firm and the open areas that call for more research. Since much of the U.S. immigration process for skilled workers rests in the hands of employer firms, a stronger understanding of these implications is essential for future policy analysis, particularly for issues relating to fostering innovation.
    JEL: F15 F22 F23 J15 J31 J44 L14 L26 O31 O32 O33
    Date: 2014–04
  22. By: Spiros Bougheas; Rod Falvey
    Abstract: We introduce financial frictions into a simple two sector model of international trade with heterogeneous agents and investigate the impact of differences in the strength of financial institutions and wealth inequality on trade flows, capital movements and entrepreneurial migration. Distinct cost-cutting and career-changing motives for entrepreneurial migration exist, which can lead to two-way entrepreneurial flows. We establish presumptions that countries with stronger financial systems or greater wealth inequality will export the output of the financially dependent sector, will import capital and will be a (net) exporter of entrepreneurs. Important exceptions are shown.
    Keywords: entrepreneurial migration; trade flows; capital flows; wealth inequality; financial frictions
    Date: 2014
  23. By: CHOE Chung; VAN KERM Philippe
    Abstract: The presence of foreign workers is commonly deemed as driving wage inequality upwards. By 2006, seven in ten private sector workers in Luxembourg were foreign. This note builds on recentered influence function regression methods to identify where these foreign workers stand in the distribution of private sector wages, and assess whether and how much their wages contribute to overall wage inequality. Our analysis of the 2006 Structure of Earnings Survey reveals that foreign workers have generally lower wages than natives and therefore tend to haul the overall wage distribution downwards. Yet, surprizingly, their influence on wage inequality reveals small and negative. All impacts are further muted when accounting for human capital and, especially, job characteristics. Not observing any large positive inequality contribution on the Luxembourg labour market is a striking result given the sheer size of the foreign workforce and its polarization at both ends of the skill distribution.
    Keywords: immigrant wages; wage inequality; cross-border workers; influence function; RIF regression; Luxembourg
    JEL: J15 J31 J61
    Date: 2014–05
  24. By: Lundborg, Per (Swedish Institute for Social Research, Stockholm University)
    Abstract: -
    Keywords: -
    Date: 2014–05–05

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