nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2015‒10‒04
ten papers chosen by
Yuji Tamura
La Trobe University

  1. The effect of board directors from countries with different genetic diversity levels on corporate performance By Delis, Mantos D.; Gaganis, Chrysovalantis; Hasan, Iftekhar; Pasiouras, Fotios
  2. Temperature Changes, Household Consumption and Internal Migration: Evidence from Tanzania By Kalle Hirvonen
  3. Risk Sharing and Internal Migration By Joachim De Weerdt; Kalle Hirvonen
  4. Risk Attitudes and Migration By Akgüc, Mehtap; Liu, Xingfei; Tani, Massimiliano; Zimmermann, Klaus F.
  5. Illegal migration and consumption behavior of immigrant households By Christian Dustmann; Francesco Fasani; Biagio Speciale
  6. Social Networks, Ethnicity, and Entrepreneurship By William R. Kerr; Martin Mandorff
  7. Environmental Tax Reform in a Federation with Rent-Induced Migration By Jean-Denis GARON; Charles SÉGUIN
  8. The Macroeconomics of Rural-Urban Migration By Mike Waugh; David Lagakos
  9. Immigrant Employment and Earnings Growth in Canada and the U.S.: Evidence from Longitudinal Data By Neeraj Kaushal; Yao Lu; Nicole Denier; Julia Shu-Huah Wang; Stephen J. Trejo
  10. The Wage Impact of the Marielitos: A Reappraisal By George J. Borjas

  1. By: Delis, Mantos D. (University of Surrey); Gaganis, Chrysovalantis (University of Crete); Hasan, Iftekhar (Gabelli School of Business, Fordham University and Bank of Finland); Pasiouras, Fotios (University of Surrey, UK, and University of Crete)
    Abstract: We link genetic diversity in the country of origin of the firms’ board members with corporate performance via board members’ nationality. We hypothesize that our approach captures deep-rooted differences in cultural, institutional, social, psychological, physiological, and other traits that cannot be captured by other recently measured indices of diversity. Using a panel of firms listed in the North American and U.K. stock markets, we find that adding board directors from countries with different levels of genetic diversity (either higher or lower) increases firm performance. This effect prevails when we control for a number of cultural, institutional, firm-level, and board member characteristics, as well as for the nationality of the board of directors. To identify the relationship, we use as instrumental variables for our diversity indices the migratory distance from East Africa and the level of ultraviolet exposure in the directors’ country of nationality.
    Keywords: genetic diversity; corporate performance; nationality of board members
    JEL: G30 M10 M14
    Date: 2015–08–17
  2. By: Kalle Hirvonen (Development Strategy And Governance, International Food Policy Research Institute)
    Abstract: Large rural-urban wage gaps observed in many developing countries are suggestive of barriers to migration that keep potential migrants in the rural areas. Using long panel data spanning nearly two decades, I study the extent to which migration rates are constrained by liquidity constraints in rural Tanzania. The analysis begins by quantifying the impact of weather variation on household welfare. The results show how household consumption co-moves with temperature rendering households vulnerable to local weather events. These temperature induced income shocks are then found to inhibit long-term migration among men, and thus preventing them from tapping into the opportunities brought about by geographical mobility.
    Date: 2015–09
  3. By: Joachim De Weerdt (Institute of Development Policy and Management, University of Antwerp); Kalle Hirvonen (Development Strategy And Governance, International Food Policy Research Institute)
    Abstract: Over the past two decades, more than half the population in our sample of rural Tanzanians has migrated out of their home-communities. We hypothesize that this powerful current of internal migrants is changing the nature of traditional institutions such as informal risk sharing. Mass internal migration has created geographically disperse networks, on which we collected detailed panel data. By quantifying how shocks and consumption co-vary across linked households we show that, while both migrants and stayers insure negative shocks to stayers, there is no one in the network who insures the migrants’ negative shocks. While migrants do share some of their positive shocks, they ultimately end up nearly twice as rich as those at home by 2010, despite practically identical baseline positions in the early nineties prior to migration. Taken together, these findings point to migration as a risky, but profitable endeavour, for which the migrant will bear the risk and also reap most of the benefit. We interpret these results within the existing literature on risk-sharing and on the disincentive effects of redistributive norms.
    Date: 2015–09
  4. By: Akgüc, Mehtap (Center for European Policy Studies (CEPS)); Liu, Xingfei (Ryerson University); Tani, Massimiliano (IZA); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: To contribute to a scarce literature, in particular for developing and emerging economies, we study the nature of measured risk attitudes and their consequences for migration. We also investigate whether substantial changes in the risk environment influences risk tolerance. Using the 2009 RUMiC data for China, we find that rural-urban migrants and their family members are substantially less risk-averse than stayers. We further provide evidence that individual risk attitudes are unaffected by substantial changes in the environment and that risk tolerance is correlated across generations.
    Keywords: risk aversion, risk attitudes, migration, China
    JEL: J61 D81
    Date: 2015–09
  5. By: Christian Dustmann; Francesco Fasani (Queen Mary University); Biagio Speciale (Université Paris 1)
    Abstract: We analyze the effect of immigrants’ legal status on their consumption behavior using unique survey data that samples both documented and undocumented immigrants. To address the problem of sorting into legal status, we propose two alternative identification strategies as exogenous source of variation for current legal status: First, transitory income shocks in the home country, measured as rainfall shocks at the time of emigration. Second, amnesty quotas that grant legal residence status to undocumented immigrants. Both sources of variation create a strong first stage, and – although very different in nature – lead to similar estimates of the effects of illegal status on consumption, with undocumented immigrants consuming about 40 percent less than documented immigrants, conditional on background characteristics. Roughly one quarter of this decrease is explained by undocumented immigrants having lower incomes than documented immigrants. Our findings imply that legalization programs may have a potentially important effect on immigrants’consumption behavior, with consequences for both the source and host countries.
    Keywords: legal status, weather shocks, consumption behavior
    JEL: F22 D12 K42
    Date: 2015–09
  6. By: William R. Kerr; Martin Mandorff
    Abstract: We study the relationship between ethnicity, occupational choice, and entrepreneurship. Immigrant groups in the United States cluster in specific business sectors. For example, Koreans are 34 times more likely than other immigrants to operate dry cleaners, and Gujarati-speaking Indians are 108 times more likely to manage motels. We develop a model of social interactions where non-work relationships facilitate the acquisition of sector-specific skills. The resulting scale economies generate occupational stratification along ethnic lines, consistent with the reoccurring phenomenon of small, socially-isolated groups achieving considerable economic success via concentrated entrepreneurship. Empirical evidence from the United States supports our model's underlying mechanisms.
    JEL: D21 D22 D85 F22 J15 L14 L26 M13
    Date: 2015–09
  7. By: Jean-Denis GARON; Charles SÉGUIN
    Abstract: We study the welfare effects of a revenue-neutral green tax reform in a federation. The reform consists of increasing a tax on a polluting input and reducing that on labor income. Households are fully mobile within the federation. Regions are unequally endowed with a nonrenewable natural resource. Resource rents are owned by regions and are redistributed to citizens on a residence basis, which generates a motive for inefficiently relocating to the resource-rich jurisdiction. Since the resource-poor region has a higher marginal product of labor than does the resource-rich region, the tax reform mitigates the scope of inefficient migration. This positive welfare effect may significantly reduce abatement costs of pollution and calls for higher environmental tax, as compared with a model where migration is assumed away.
    Keywords: federalism, environment, taxation, equalization, mobility, externalities
    JEL: D62 H21 H23 H77
    Date: 2015
  8. By: Mike Waugh (New York University); David Lagakos (University of California, San Diego)
    Abstract: This paper uses new tracking surveys for several developing countries to analyze rural-urban migration and their macroeconomic implications. We document that migrants from rural to urban areas typically experience large consumption growth one year after migrating, though overall migration rates are low. To understand these facts we build a model that generates a rural-urban gap in average consumption due to three factors: income risk from migration, worker sorting, and disutility from migration. We structurally estimate the model and assess the relative importance of each factor in explaining rural-urban consumption gaps. We then cross-check the model's predictions using evidence from a controlled migration experiment. Quantitative experiments using the model provide guidance about the quantitative importance of migration policy on aggregate consumption growth.
    Date: 2015
  9. By: Neeraj Kaushal; Yao Lu; Nicole Denier; Julia Shu-Huah Wang; Stephen J. Trejo
    Abstract: We study the short-term trajectories of employment, hours worked, and real wages of immigrants in Canada and the U.S. using nationally representative longitudinal datasets covering 1996-2008. Models with person fixed effects show that on average immigrant men in Canada do not experience any relative growth in these three outcomes compared to men born in Canada. Immigrant men in the U.S., on the other hand, experience positive annual growth in all three domains relative to U.S. born men. This difference is largely on account of low-educated immigrant men, who experience faster or longer periods of relative growth in employment and wages in the U.S. than in Canada. We further compare longitudinal and cross-sectional trajectories and find that the latter over-estimate wage growth of earlier arrivals, presumably reflecting selective return migration.
    JEL: J15 J18
    Date: 2015–09
  10. By: George J. Borjas
    Abstract: This paper brings a new perspective to the analysis of the Mariel supply shock, revisiting the question and the data armed with the accumulated insights from the vast literature on the economic impact of immigration. A crucial lesson from this literature is that any credible attempt to measure the wage impact of immigration must carefully match the skills of the immigrants with those of the pre-existing workforce. The Marielitos were disproportionately low-skill; at least 60 percent were high school dropouts. A reappraisal of the Mariel evidence, specifically examining the evolution of wages in the low-skill group most likely to be affected, quickly overturns the finding that Mariel did not affect Miami’s wage structure. The absolute wage of high school dropouts in Miami dropped dramatically, as did the wage of high school dropouts relative to that of either high school graduates or college graduates. The drop in the relative wage of the least educated Miamians was substantial (10 to 30 percent), implying an elasticity of wages with respect to the number of workers between -0.5 and -1.5. In fact, comparing the magnitude of the steep post-Mariel drop in the low-skill wage in Miami with that observed in all other metropolitan areas over an equivalent time span between 1977 and 2001 reveals that the change in the Miami wage structure was a very unusual event. The analysis also documents the sensitivity of the estimated wage impact to the choice of a placebo. The measured impact is much smaller when the placebo consists of cities where pre-Mariel employment growth was weak relative to Miami.
    JEL: J2 J31 J61
    Date: 2015–09

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