nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2015‒11‒07
fourteen papers chosen by
Yuji Tamura
La Trobe University

  1. Minimum Wages and Spatial Equilibrium: Theory and Evidence By Monras, Joan
  2. Do Employers Prefer Migrant Workers? Evidence from a Chinese Job Board By Peter Kuhn; Kailing Shen
  3. Absorption of Foreign Knowledge: Firms’ Benefits of Employing Immigrants By Jürgen Bitzer; Erkan Gören; Sanne Hiller
  4. The impact of cultural diversity on firm innovation: evidence from Dutch micro-data By Ceren Ozgen; Peter Nijkamp; Jacques Poot
  5. The Use and Impact of Job Search Procedures by Migrant Workers in China By Fang, Tony; Gunderson, Morley; Lin, Carl
  6. Speaking in Numbers: The Effect of Reading Performance on Math Performance among Immigrants By Isphording, Ingo E.; Piopiunik, Marc; Rodríguez-Planas, Núria
  7. Does Cultural Diversity of Migrant Employees Affect Innovation? By Ceren Ozgen; Cornelius Peters; Annekatrin Niebuhr; Peter Nijkamp; Jacques Poot
  8. The Migration Response to Increasing Temperatures By Cristina Cattaneo; Giovanni Peri
  9. The Association between Immigration and Labor Market Outcomes in the United States By Basso, Gaetano; Peri, Giovanni
  10. Self‐Selection of Emigrants: Theory and Evidence on Stochastic Dominance in Observable and Unobservable Characteristics By Borjas, George J.; Kauppinen, Ilpo; Poutvaara, Panu
  11. Labour Mobility of Migrants and Natives in the European Union: An Empirical Test of the 'Greasing of the Wheels’ Effect of Migrants By Michael Landesmann; Sandra M. Leitner
  12. Intra-EU Mobility and Push and Pull Factors in EU Labour Markets: Estimating a Panel VAR Model By Michael Landesmann; Sandra M. Leitner
  13. Migration State and Welfare State: Competition vs. Coordination in an Economic Union By Assaf Razin; Efraim Sadka
  14. The Educational Achievement of Pupils with Immigrant and Native Mothers: Evidence from Taiwan By Lin, Eric S.; Lu, Yu-Lung

  1. By: Monras, Joan (Sciences Po, Paris)
    Abstract: Often, minimum wage laws are decided at the state or regional level, and even when not, federal level increases are only binding in certain states. This has been used in previous literature to evaluate the effects of minimum wages on earnings and employment levels. This paper introduces a spatial equilibrium model to think about the seemingly conflicting findings of this previous literature. The model shows that the introduction of minimum wages can lead to an increase or a decrease in population depending on the local labor demand elasticity and on how unemployment benefits are financed. The paper provides empirical evidence consistent with the model. On average, increases in minimum wages lead to increases in average wages and decreases in employment. The low-skilled local labor demand elasticity is estimated to be above 1, which in the model is a necessary condition for the migration responses found in the data. Low-skilled workers, who are presumably the target of the policy, tend to leave or avoid moving to the regions that increase minimum wages.
    Keywords: minimum wages, spatial equilibrium, internal migration
    JEL: J38
    Date: 2015–10
  2. By: Peter Kuhn; Kailing Shen
    Abstract: We study urban, private sector Chinese employers’ preferences between workers with and without a local permanent residence permit (hukou) using callback information from an Internet job board. We find that these employers prefer migrant workers to locals who are identically matched to the job’s requirements; these preferences are strongest in jobs requiring lower levels of education and offering low pay. While migrant-native payroll tax differentials might account for some of this gap, we argue that the patterns are hard to explain without some role for a migrant productivity advantage in less skilled jobs. Possible sources of this advantage include positive selection of nonlocals into migration, negative selection of local workers into formal search for unskilled private sector jobs, efficiency wage effects related to unskilled migrants’ limited access to the urban social safety net, and intertemporal labor and effort substitution by temporary migrants that makes them more desirable workers.
    JEL: J71 O15 R23
    Date: 2015–10
  3. By: Jürgen Bitzer (University of Oldenburg, Department of Economics); Erkan Gören (University of Oldenburg, Department of Economics); Sanne Hiller (Ruhr University Bochum)
    Abstract: This paper explores the question of how immigrant employees affect a firm’s capacity to absorb foreign knowledge. Using matched employer-employee data from Denmark for the years 1996 to 2009, we are able to show that non-Danish employees from technologically<br>advanced countries contribute significantly to a firm’s total factor productivity (TFP) through their ability to access foreign knowledge. The empirical results suggest that the impact increases if the immigrants come from technologically advanced countries, are highly educated, and work in high-skilled positions.
    Keywords: R&D Spillovers, Absorptive Capacity, Firm-Level Analysis,<br>Foreign Workers, Immigrants
    JEL: D20 J82 L20 O30
    Date: 2015–10
  4. By: Ceren Ozgen (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam); Jacques Poot (University of Waikato)
    Abstract: An important question for firms and policymakers is whether the recruitment of foreign workers can boost innovation. Migration studies have demonstrated positive economic impacts of cultural diversity on productivity and innovation at the regional level, but the impacts at firm level are less well known. Merging data from four different sources, provided by Statistics Netherlands, we construct and analyze a unique linked employer-employee micro dataset of 4582 firms that includes qualitative information on firm innovation. We consider both the number of immigrants these firms employ and their cultural diversity. Potential endogeneity of migrant employment is addressed by an instrumental variables approach that accounts for the past geographic distribution of immigrants and the past culinary diversity of the municipality the firm is located in. We find robust evidence that firms employing relatively more migrants are less innovative. However, there is evidence of integration in that this effect is generall less strong or even absent for second generation immigrants. Moreover, firms employing a more diverse foreign workforce are more innovative, particularly in terms of product innovations. The benefits of diversity for innovation are more apparent in sectors employing relatively more skilled immigrants.
    Keywords: Immigration,Innovation,Cultural diversity, Knowledge spillovers,Netherlands
    JEL: D22 F22 O31
    Date: 2013–12
  5. By: Fang, Tony (Memorial University of Newfoundland); Gunderson, Morley (University of Toronto); Lin, Carl (Bucknell University)
    Abstract: Job search procedures are a form of human capital investment in that they involve current investments to enhance future returns, analogous to human capital investments in areas such as education, training and mobility that yield future returns. While the theoretical and empirical literature on job search is extensive, most of it involves developed countries. There is less on developing countries and very little on China involving migrant workers in spite of their growing practical and policy importance and the fact that they are constantly engaging in job search. This paper examines the use and impact of job search procedures used by migrant workers in China by taking advantage of a rich data set on migrant workers that has information on their job search procedure as well as a wide array of other personal and human capital characteristics. Our OLS estimates indicate that there is no effect on earnings of using informal versus formal job search procedures for migrant workers in China. However, our IV results suggest that the OLS estimates are subject to severe selection bias from the fact that the choice of job search procedure is endogenous, associated with unobservable factors that affect the choice of informal versus formal procedures and that affect the earnings outcome. Our three different IV estimates designed to deal with this bias indicate that informal procedures (various aspects of family and friends) are associated with earnings that are 33 to 43 percent below the uses of more formal procedures. The decomposition results indicate that the most important variable contributing to pay advantage of those who use formal as opposed to informal procedures is education. In sum, our results suggest that policies to encourage or facilitate migrant workers using more formal job search procedures and reducing barriers that compel them to rely on informal procedures can yield better job matches with higher earnings.
    Keywords: job search methods, migrant workers, labour market outcomes, China
    JEL: J31 J61 J64
    Date: 2015–10
  6. By: Isphording, Ingo E. (IZA); Piopiunik, Marc (Ifo Institute for Economic Research); Rodríguez-Planas, Núria (Queens College, CUNY)
    Abstract: This paper is the first to estimate a causal effect of immigrant students' reading performance on their math performance. To overcome endogeneity issues due to unobserved ability, we apply an IV approach exploiting variation in age-at-arrival and the linguistic distance between origin and destination country languages. Using four PISA waves, we find a strong influence of reading performance on math performance, highlighting the importance of early language support for immigrants for their educational career.
    Keywords: immigrants, language, math performance, linguistic distance, age-at-arrival, instrumental variable
    JEL: I21 I24 Z13
    Date: 2015–10
  7. By: Ceren Ozgen (VU University Amsterdam); Cornelius Peters (IAB); Annekatrin Niebuhr (Christian-Albrechts-Universitat zu Kiel); Peter Nijkamp (VU University Amsterdam); Jacques Poot (University of Waikato)
    Abstract: Increasing international labor migration has important effects on the workforce composition of firms in all migrant-receiving countries. The consequences of these changes for firm performance have attracted growing attention in recent years. In this paper, we focus explicitly on the impact of cultural diversity among migrant employees on the innovativeness of firms. We briefly synthesize empirical evidence from a range of contexts across Europe, North America, and New Zealand. We then utilize two unique and harmonized linked employer–employee datasets to provide comparative microeconometric evidence for Germany and the Netherlands. Our panel datasets contain detailed information on the generation of new products and services, determinants of innovation success, and the composition of employment in establishments of firms over the period 1999 to 2006. We find that innovation in both countries is predominantly determined by establishment size and industry. Moreover, obstacles encountered and organizational changes faced by firms drive innovation too. With respect to the composition of employment, the presence of high-skilled staff is most important. Cultural diversity of employees has a positive partial correlation with product innovation. The size and statistical significance of this effect depends on the econometric model specification and the country considered. We conclude from the literature synthesis and the new comparative evidence that cultural diversity of employees can make a positive, but modest and context dependent, contribution to innovation.
    Date: 2014–12
  8. By: Cristina Cattaneo; Giovanni Peri
    Abstract: Climate change, especially the warming trend experienced by several countries, could affect agricultural productivity. As a consequence the income of rural populations will change, and with them the incentives for people to remain in rural areas. Using data from 116 countries between 1960 and 2000, we analyze the effect of differential warming trends across countries on the probability of either migrating out of the country or from rural to urban areas. We find that higher temperatures increased emigration rates to urban areas and to other countries in middle income economies. In poor countries, higher temperatures reduced the probability of emigration to cities or to other countries, consistently with the presence of severe liquidity constraints. In middle-income countries, migration represents an important margin of adjustment to global warming, potentially contributing to structural change and even increasing income per worker. Such a mechanism, however, does not seem to work in poor economies.
    JEL: F22 Q1 R12
    Date: 2015–10
  9. By: Basso, Gaetano (University of California, Davis); Peri, Giovanni (University of California, Davis)
    Abstract: In this paper we present important correlations between immigration and labor market outcomes of native workers in the US. We use data on local labor markets, states and regions from the Census and American Community Survey over the period 1970-2010. We first look at simple correlations and then we use regression analysis with an increasing number of controls for observed and unobserved factors. We review the potential methods to separate the part of this correlation that captures the causal link from immigrants to native labor outcomes and we show estimates obtained with 2SLS method using the popular shift-share instrument. One fact emerging from all the specifications is that the net growth of immigrant labor has a zero to positive correlation with changes in native wages and native employment, in aggregate and by skill group. We briefly review the literature on the channels and the mechanisms that allow local economies to absorb immigrants with no negative (and possibly positive) impact on the labor demand for natives.
    Keywords: immigration, employment, wages, labor markets
    JEL: J21 J31 J61
    Date: 2015–10
  10. By: Borjas, George J. (Harvard University); Kauppinen, Ilpo (VATT, Helsinki); Poutvaara, Panu (University of Munich)
    Abstract: We show that the Roy model has more precise predictions about the self‐selection of migrants than previously realized. The same conditions that have been shown to result in positive or negative selection in terms of expected earnings also imply a stochastic dominance relationship between the earnings distributions of migrants and non-migrants. We use the Danish full population administrative data to test the predictions. We find strong evidence of positive self‐selection of emigrants in terms of pre-emigration earnings: the income distribution for the migrants almost stochastically dominates the distribution for the non‐migrants. This result is not driven by immigration policies in destination countries. Decomposing the self‐selection in total earnings into self‐selection in observable characteristics and self‐selection in unobservable characteristics reveals that unobserved abilities play the dominant role.
    Keywords: international migration, Roy model, self-selection
    JEL: F22 J61
    Date: 2015–10
  11. By: Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Abstract In the context of current developments of large refugee movements across Europe, it is important to study the impact of migration flows in the European economy. One aspect of this is the impact on mobility patterns (i.e. in and out of jobs, across sectors, across regions and across types of jobs). This paper presents a comprehensive account of key determinants of labour mobility of both migrant and native workers across the EU economies between 2000 and 2011. The main indicators examined are the gross employment reallocation and net employment creation rates (GERR and NECR, respectively) taken over from Davis and Haltiwanger (1992, 1999). We analyse differences in mobility patterns in the EU‑15 and the NMS as regards age groups, skill groups, gender, length of job tenure, and the impact of labour market institutions. A particular focus of the study is the potential of migrants to ‘grease the wheels’ (Borjas, 2001) of labour markets by either themselves showing higher mobility rates or impacting on the mobility patterns of natives or existing migrants. This impact is analysed in great detail with respect to the differentiated impact of migrants of different skill groups or from different countries of origin on patterns of labour market mobility. Furthermore, apart from overall labour market mobility, we also examine inter-regional and inter-sectoral mobility.
    Keywords: labour mobility, employment reallocation, net employment creation, European Union, international migration, inter-sectoral and regional migration
    JEL: F22 J61 J62 J63 R23
    Date: 2015–08
  12. By: Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Abstract The analysis of the international migration flows, their determinants and the impact on host countries' labour markets is of great interest in the context of current European developments. This paper analyses the role of EU labour market mobility, specifically cross-border mobility by migrants, in labour market adjustments and, vice versa, how labour market developments across the EU in terms of relative wage differences, differences in activity rates, in labour productivity differentials and in human capital structures affect labour mobility. The analysis is carried out in the context of estimating a panel Vector Auto Regressive (pVAR) model involving bilateral net migration flows and cross-country differences in the above variables. It is estimated for the period 2000 to 2012, thus capturing also the two waves of accession of Central and Eastern European new Member States (NMS). The estimations are performed for cross-border mobility patterns for the EU as a whole, as well as for the migration patterns between NMS and OMS, thus analysing the changes which the integration of new Member States may have caused to labour market and mobility dynamics in the European Union.
    Keywords: labour mobility, determinants of migration flows, European Union, new Member States, econometric analysis of labour mobility, panel VAR model, push and pull factors of migration
    JEL: F22 J61 J62 J63 R23
    Date: 2015–08
  13. By: Assaf Razin; Efraim Sadka
    Abstract: We develop a political-economy model of economic union and compare the competion regime to the coordination regime. Key policy differences emerge between the two regimes: concerning the generosity of the welfare state and the skill composition of migration. We argue that the differences between the U.S. and the EU - the degree of coordination among the member states - contribute to the observed policy differences, as the model predicts.
    JEL: F2 F42 H1
    Date: 2015–10
  14. By: Lin, Eric S. (National Tsing Hua University); Lu, Yu-Lung (National Tsing Hua University)
    Abstract: This paper takes advantage of the Taiwan Assessment of Student Achievement data set to empirically evaluate whether the test score differentials between pupils with immigrant and native mothers are substantial across subjects, grades and years. Our results show that there exist test score differentials between the two groups after controlling for the students' individual characteristics and family background. The Chinese, Math and English subjects exhibit larger test score gaps relative to Science and Society. We also find that the academic gaps between native students and pupils with mothers from Southeast Asian countries tend to widen, while the students' performance is about the same as that for native students if their mothers are from mainland China, confirming that the language proficiency of immigrant mothers significantly affects pupils' learning. Our empirical results may suggest that remedial teaching (or an equivalent preferential policy) for the lower-grade pupils with immigrant mothers might be required to create a fair environment for learning, and such a policy should take the nationality of those foreign mothers into account.
    Keywords: academic performance, immigrants, foreign spouse
    JEL: A2 I2
    Date: 2015–10

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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