nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2015‒01‒31
twelve papers chosen by
Yuji Tamura
La Trobe University

  1. Are Migrant Agricultural Workers Replacing the Local Workforce? By Kimhi, Ayal
  2. Optimal Spatial Taxation By Nezih Guner ; Jan Eeckhout
  3. Fairness, socialization and the cultural deman for redistribution By Gilles Le Garrec
  4. Would more extensive out-migration of rural farmers expedite farm mechanization? Evidence from a changing Chinese agricultural sector By Luo, Tianyuan ; Escalante, Cesar
  5. Migration, Congestion Externalities, and the Evaluation of Spatial Investments By Schulhofer-Wohl, Sam ; Dinkelman, Taryn
  6. Intentions to return : evidence from Romanian migrants By Hinks, Tim ; Davies, Simon
  7. Exporting, Innovation and the Role of Immigrants By Isabelle Sin ; Richard Fabling ; Adam B. Jaffe ; David C. Maré ; Lynda Sanderson
  8. Immigrants and Mortgage Delinquency in the United States By Zhenguo Lin ; Yingchun Liu ; Jia Xie
  9. Offshoring, low-skilled immigration, and labor market polarization By Mandelman, Federico S. ; Zlate, Andrei
  10. The impact of the assimilation of migrants on the well-being of native inhabitants: A theory By Stark, Oded ; Bielawski, Jakub ; Jakubek, Marcin
  11. Modelling regional labour market dynamics. Participation, employment and migration decisions in a spatial CGE model for the EU By Damiaan Persyn ; d'Artis Kancs ; Wouter Torfs
  12. Immigration Policy Index By Dmytro Vikhrov

  1. By: Kimhi, Ayal
    Abstract: Migration patterns in Israeli agriculture have gone through different phases. Labor flowed into farming until the country became self‐sufficient in terms of food supply. Then, self‐employed farmers exited gradually while production continued to increase, destined for export markets. This process intensified considerably when foreign labor was allowed to enter the country. Traditional production theory predicts that migrant workers will drive local workers to lose their jobs, but the Israeli data show that the number of Israeli hired farm workers has actually increased since the arrival of foreign labor. This paper develops a modified theoretical model in which farm labor is heterogeneous, so that changes in the number of foreign and local hired workers are not necessarily opposite in sign. The results of the model are consistent with the observation that the availability of foreign labor has led to an increase in the production and export of labor‐intensive horticultural products. Farms have become larger and more specialized, and this has led to labor specialization, with foreign workers performing the manual tasks and Israeli hired employees performing the managerial and professional ones. We conclude that the inflow of foreign workers has led to an irreversible structural change in Israeli agriculture. Surrendering to the popular demand to reduce the number of foreign workers for the benefit of local workers will actually lessen the demand for local farm workers.
    Keywords: Agribusiness, Agricultural Finance, Labor and Human Capital,
    Date: 2015
  2. By: Nezih Guner (Universitat Autonoma de Barcelona ); Jan Eeckhout (University College London and GSE-UPF )
    Abstract: We analyze the role of optimal income taxation across different locations. Existing federal income tax schedules have a distortionary effect and result in the misallocation of labor across cities of different size. Because of higher productivity in big cities, wages for identically skilled workers are larger than in small cities. Progressive taxation thus implies that citizens in big cities pay higher taxes than in small cities. With mobility, utility is equalized, and the taxes are reflected in equilibrium wages and house prices. We solve for the optimal level of progressiveness. We find that the optimal level is not zero, but that it is less than what is observed in the US economy. Simulating the US economy under the optimal tax schedule, we find large effects on output and population mobility. GDP increases are in the range of 2.6–8.8%, and the fraction of population in 5 largest cities grows between 1.5–4.9%. The welfare effects however are small, 0.008–0.067%. This is due to the fact that the big output gains are lost in increased costs of living.
    Date: 2014
  3. By: Gilles Le Garrec (OFCE )
    Abstract: When studying redistributive attitudes, surveys show that individuals do care about fairness. They also show that the cultural environment in which individuals grow up aspects their preferences about redistribution. In this article we include these two components of the demand for redistribution in order to develop a mechanism for the cultural transmission of the concern for fairness. The preferences of the young are partially shaped through the observation and imitation of others.choices in a way that is consistent with the so- cialization process. More specifically, observing during childhood how adults have collectively failed to implement fair redistributive policies lowers the concern for fairness or the moral cost of not supporting fair taxation. Based on this mechanism, the model exhibits a multiplicity of history-dependent steady states that may account for the huge and persistent differences in redistribution observed between Europe and the United States. It also explains why immigrants from countries with a preference for greater redistribution continue to support higher redistribution in their destination country.
    Keywords: Redistribution; fairness; majority rule; socialization; endogenous preference
    JEL: H53 D63 D72
    Date: 2014–12
  4. By: Luo, Tianyuan ; Escalante, Cesar
    Abstract: Changes in agricultural population can significantly influence the progress of mechanization, which provides efficient momentum to the further development of agriculture. We examine the effect of the declining agricultural population on mechanization and determine the variables that have decisive power over mechanical adoption decisions. This analysis of a panel data of top six out-migration provinces in China under a fixed effect model, we find that the overly fast and unusual decline in agricultural population actually slowed down the progress of mechanization, and the many years of large scale out-migration encouraged by government actually jeopardized sustainable agricultural development. Results underscore the need for considerable attention on the growth of annual farm incomes and agricultural products import that could have substantial effects on agricultural mechanization decisions.
    Keywords: agricultural population, mechanization, farm exit, import, Consumer/Household Economics, Labor and Human Capital, Research and Development/Tech Change/Emerging Technologies,
    Date: 2015
  5. By: Schulhofer-Wohl, Sam (Federal Reserve Bank of Minneapolis ); Dinkelman, Taryn (Dartmouth College )
    Abstract: The direct benefits of infrastructure in developing countries can be large, but if new infrastructure induces in-migration, congestion of other local publicly provided goods may offset the direct benefits. Using the example of rural household electrification in South Africa, we demonstrate the importance of accounting for migration when evaluating welfare gains of spatial programs. We also provide a practical approach to computing welfare gains that does not rely on land prices. We develop a location choice model that incorporates missing land markets and allows for congestion in local land. Using this model, we construct welfare bounds as a function of the income and population effects of the new electricity infrastructure. A novel prediction from the model is that migration elasticities and congestion effects are especially large when land markets are missing. We empirically estimate these welfare bounds for rural electrification in South Africa and show that congestion externalities from program-induced migration reduced local welfare gains by about 40%
    Keywords: rural infrastructure; migration; congestion; welfare; program evaluation; South AFrica
    JEL: H23 H43 H54 O15 O18 R13
    Date: 2015–01–09
  6. By: Hinks, Tim ; Davies, Simon
    Abstract: Romania faces an acute population crisis with an aging workforce and an increased number of emigrants particularly from the young, highly educated/skilled population. This paper uses a new cross-sectional data set of Romanian emigrants to find which factors are related to plans to return home permanently. The analysis pays particular attention to differences in expected earnings and skills and training acquired as a migrant. The study finds that higher expected earnings in Romania and investment in Romanian firms are positively correlated with plans to return migrate. Policies that boost productivity and therefore wages as well as policies that improve the business climate could therefore encourage Romanian migrants to return to Romania, moderating the negative consequences of the declining and aging population, and increasing the skill stock of the Romanian labor force.
    Keywords: Population Policies,Debt Markets,Remittances,Voluntary and Involuntary Resettlement,Human Migrations&Resettlements
    Date: 2015–01–01
  7. By: Isabelle Sin (Motu Economic and Public Policy Research ); Richard Fabling (Motu Economic and Public Policy Research ); Adam B. Jaffe (Motu Economic and Public Policy Research ); David C. Maré (Motu Economic and Public Policy Research ); Lynda Sanderson (New Zealand Treasury )
    Abstract: This research uses Statistics New Zealand’s Integrated Data Infrastructure and data from the Business Operations Survey to investigate the correlations at the firm level between a) employee characteristics and firm international engagement, and b) firm international engagement and innovation. The main findings on employee characteristics and international engagement are: • Firms that employ a higher fraction of high-ability foreigners (and thus a lower fraction of high-ability natives) are more likely to export. • Firms that employ a higher proportion of people who previously worked for an exporter are more likely to export. • The proportions of foreign employees and employees with export experience are correlated with many other types of international engagement by firms. • Employees from Australia and the Pacific and from Europe are positively correlated with firm exporting. The correlations are absent for foreign employees from Asia. • The probability that a firm earns income in a given country is more correlated with its fraction of employees from that country than with its total fraction of foreign employees. • A firm with a higher fraction of employees from a given country is more likely to earn income in that country only if the country is developed. The main findings on international engagement and innovation are: • Firms that export innovate more, even after controlling for size. • Among exporters, the proportion of firm sales that comes from exports shows little correlation with innovation. • Firms that export to more countries innovate more. • Exports of raw goods have little correlation with innovation; exports of manufactured goods or services have a strong correlation. • Firms that recently entered a new export market report especially high innovation, and firms that began earning overseas income in the previous two years report higher innovation than those that have earned overseas income for a longer period. • Not all export destinations are correlated with higher innovation. Exports to the Americas are positively correlated with innovation, but there is no evidence that firms that export more to Asia are more likely to innovate. • In addition to exporting, most other types of international engagement, such as inward and outward foreign direct investment, are positively correlated with innovation. • Firms' sources of ideas for innovation vary with the types of international engagement in which they are involved. The patterns are consistent with exporters gaining ideas from their international customers, firms gaining ideas from their foreign owners, and importers gaining ideas from their foreign suppliers. Although these relationships are correlations only and should not be interpreted as proof of causality, they do suggest that the experience and specialized knowledge of employees may be relevant to firms’ decisions to engage internationally, and that such engagement may act as a conduit for foreign knowledge to enter the country.
    Keywords: exporting, innovation, migrants, international engagement, workforce composition
    JEL: O31 F16 F22 J61 J24
    Date: 2014–12
  8. By: Zhenguo Lin ; Yingchun Liu ; Jia Xie
    Abstract: We investigate the relationship between immigrant status and mortgage delinquency in the United States. We find that after controlling for observables, newly arrived immigrants are likely to have a higher delinquency rate on mortgages than natives, while immigrants who have resided in the United States for more than 20 years are no different than natives in this regard. In addition, there is no evidence that the second generation of immigrants has a higher delinquency rate than the third-or-higher generation. Our results are robust to potential sample selection bias and functional misspecifications.
    Keywords: Debt Management, Financial stability
    JEL: G G2 G21 J J1 J15
    Date: 2015
  9. By: Mandelman, Federico S. (Federal Reserve Bank of Atlanta ); Zlate, Andrei (Federal Reserve Bank of Boston )
    Abstract: During the last three decades, jobs in the middle of the skill distribution disappeared, and employment expanded for high- and low-skill occupations. Real wages did not follow the same pattern. Although earnings for the high-skill occupations increased robustly, wages for both low- and middle-skill workers remained subdued. We attribute this outcome to the rise in offshoring and low-skilled immigration, and we develop a three-country stochastic growth model to rationalize this outcome. In the model, the increase in offshoring negatively affects the middle-skill occupations but benefits the high-skill ones, which in turn boosts aggregate productivity. As the income of high-skill occupations rises, so does the demand for services provided by low-skill workers. However, low-skill wages remain depressed as a result of the surge in unskilled immigration. Native workers react to immigration by upgrading the skill content of their labor tasks as they invest in training.
    Keywords: labor market polarization; task upgrading; offshoring; labor migration; heterogeneous agents; international business cycles
    JEL: F16 F41
    Date: 2014–12–01
  10. By: Stark, Oded ; Bielawski, Jakub ; Jakubek, Marcin
    Abstract: We present a theory that systematically and causally links the well-being of native inhabitants with variation in the extent of the assimilation of migrants. Recent empirical findings are yielded as predictions of the theory.
    Keywords: Migrants' assimilation,The well-being of native inhabitants
    JEL: I31 J61
    Date: 2014
  11. By: Damiaan Persyn (European Commission – JRC - IPTS ); d'Artis Kancs (European Commission – JRC - IPTS ); Wouter Torfs (European Commission – JRC - IPTS )
    Abstract: This paper outlines how regional labour market adjustments to macro-economic and policy shocks are modelled in RHOMOLO through participation, employment and migration decisions of workers. RHOMOLO, being a multi-sectoral, inter-regional general equilibrium model, is complex both in terms of its dimensionality and the modelling of spatial interactions through trade flows and factor mobility. The modelling of the labour market is therefore constrained by the tractability and computational solvability of the model. The labour market module consists of individual labour participation decisions, including the extensive margin (to participate or not) and the intensive margin (hours of work). Unemployment is determined through a wage curve and inter-regional labour migration decisions are modelled in a discrete-choice framework, with backward-looking expectations.
    Keywords: Participation, unemployment, labour migration, wage curve, CGE, new economic geography
    JEL: C68 D58 F22 J20 J61 J64 O15
    Date: 2014–12
  12. By: Dmytro Vikhrov
    Abstract: I construct an immigration policy index which is heterogeneous across destinationorigin country pairs and variant over time. This index is based on three types of entry visa restrictions: visa required, visa not required for short stays and visa not required at all. When estimated in levels, visa exempt country pairs account for around 15% more migrants than their counterfactual. I show that the effects of migration determinants vary by the type of visa restrictions. Further, I identify country pairs which changed their visa regime during 2000-2010 and find that the weakening of visa policy is associated with a 10% increase in migrant stocks and a significant shift toward male and less skilled migration from policy affected source countries. In contrast, the tightening of visa policy is not related to a significant change in migrant stocks, their gender or skill composition.
    Keywords: immigration policy; visa; difference-in-difference estimation; policy quasi-experiment; group heterogeneity; diaspora effect;
    JEL: F22 R23
    Date: 2014–12

This nep-mig issue is ©2015 by Yuji Tamura. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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