nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2016‒01‒03
fourteen papers chosen by
Yuji Tamura
La Trobe University

  1. Household Location Decisions and the Value of Climate Amenities By Paramita Sinha; Maureen L. Cropper
  2. Housing equity, residential mobility and commuting By Bloze, Gintautas; Skak, Morten
  3. Who comes and Why? Determinants of Immigrants Skill Level in the Early XXth Century US By Matias Covarrubias; Jeanne Lafortune; José Tessada
  4. The Determinants of International Migration in Pakistan: New Evidence from Combined Cointegration, Causality and Innovative Accounting Approach By Ahad, Muhammad
  5. The Effect of Linguistic Proximity on the Occupational Assimilation of Immigrant Men in Canada By Alicia Adsera; Ana Ferrer
  6. Immigration to the U.S.: A problem for the Republicans or the Democrats? By Mayda, Anna Maria; Peri, Giovanni; Steingress, Walter
  7. Ability Drain By Schiff, Maurice
  8. Educational Attainment and Labor Market Performance: An Analysis of Immigrants in France By Mehtap Akguc; Ana Ferrer
  9. Growth in first- and second-generation immigrant firms in Sweden By Efendic, Nedim; Andersson, Fredrik W.; Wennberg, Karl
  10. Illegal Immigration and the Shadow Economy By Camacho, Carmen; Mariani, Fabio; Pensieroso, Luca
  11. Occupational Skills and Labour Market Progression of Canadian Immigrant Women By Alicia Adsera; Ana Ferrer
  12. Emigration, Remittances and the Education of Children Staying Behind: Evidence from Tajikistan By Barbara Dietz; Kseniia Gatskova; Artjoms Ivlevs
  13. The Effect of Remittances on Labour Supply in the Republic of Haiti By Jadotte, Evans; Ramos, Xavi
  14. Mobility and Entrepreneurship: Evaluating the scope of knowledge-based theories of entrepreneurship By Fredriksen, Lars; Wennberg, Karl; Balachandran, Chanchal

  1. By: Paramita Sinha; Maureen L. Cropper
    Abstract: We value climate amenities by estimating a discrete location choice model for U.S. households. The utility of each Metropolitan Statistical Area (MSA) depends on location-specific amenities, earnings opportunities, housing costs, and the cost of moving to the MSA from the household head’s birthplace. We use the estimated trade-off between wages, housing costs and climate amenities to value changes in mean winter and summer temperatures. We find that households sort among MSAs due to heterogeneous tastes for winter and summer temperature. Preferences for winter and summer temperature are negatively correlated: households that prefer milder winters, on average, prefer cooler summers and households that prefer colder winters prefer warmer summers. Households in the Midwest region, on average, have lower marginal willingness to pay to increase winter and reduce summer temperatures than households in the Pacific and South Atlantic census divisions. We use our results to value changes in winter and summer temperature for the period 2020 to 2050 under the B1 (climate-friendly) and A2 (more extreme) climate scenarios. On average, households are willing to pay 1% of income to avoid the B1 scenario and 2.4% of income to avoid the A2 scenario.
    JEL: Q5 Q51
    Date: 2015–12
  2. By: Bloze, Gintautas (Department of Leadership and Corporate Strategy); Skak, Morten (Department of Business and Economics)
    Abstract: Highly productive economies require a flexible labor force with workers that move in accordance with the changing demand for goods and services. In times with falling housing prices, home owning workers’ mobility may be hampered by a lock-in effect from low and negative equity. This paper explores the effect of housing equity on homeowners’ residential mobility and their commuting pattern. We merge administrative registers for the Danish population and properties and get highly reliable micro data for our analysis. We compare the lock-in of homeowners with high LTV ratios under a booming economy with the lock-in when the economy is in recession. Low and negative equity reduces residential mobility, with similar relative effects in boom and slump periods. The negative impact on labor market flexibility from low equity lock-in is stronger when the economy is in recession and housing prices are falling. We show that this is mitigated by a comparatively high propensity to commute for locked-in homeowners when the labor market tightens.
    Keywords: Mobility; Commuting; LTV ratio; Home equitiy; Mortgage lock-in
    JEL: G21 J61 R23 R51
    Date: 2015–12–15
  3. By: Matias Covarrubias; Jeanne Lafortune; José Tessada
    Abstract: This paper first elaborates a model of intermediate selection where potential migrants must have both the resources to finance the migration cost (liquidity constraint restriction) and an income gain of migrating (economic incentives restriction). We then test the predictions of the model regarding the impact of output in the sending country and migration costs on average skill level of immigrants to the United States from 1899 to 1932, where immigration was initially unrestricted by law and then highly limited. Our panel of 39 countries includes data on occupations that immigrants had in their country of origin, providing a more accurate skill measure than previously available datasets. We find that migration costs have a negative but skill-neutral effect on quantity of immigrants and an increase in output, measured as GDP per capita, has a positive effect on quantity and a negative effect on average skill level of immigrants, suggesting that the main channel by which changes in output affected the average skill level of migrants in that time period is through the easing or tightening of the liquidity constraints and not through the economic incentives as in previous models. Also, using migrants’ occupation in the United States as a measure of skills would lead to misleading conclusions.
    JEL: F22 H56 J61 O15
    Date: 2014
  4. By: Ahad, Muhammad
    Abstract: This study investigates the determinants of international migration over the period of 1980-2013 for Pakistan. In order to investigate the relationship between migration, inflation, remittances and unemployment, we have applied Bayer-Hanck combined cointegration to test whether a long run relationship exists between variables or not. The results predict that series are stationary at 1st difference and cointegration exist among variables. VECM Granger causality explains that inflation, remittances and unemployment cause migration in both short and long run. Variance Decomposition Approach shows that unemployment has highest share in explaining migration and migration also has highest share in explaining unemployment in both short run and long run. Policy maker should focus on reduction of unemployment by promoting real sector economic activates to control international migration.
    Keywords: Migration, Remittance, Unemployment, Cointegration, Innovative Accounting Approach, Pakistan.
    JEL: F22
    Date: 2015
  5. By: Alicia Adsera (Woodrow Wilson School of International and Public Affairs, Princeton University); Ana Ferrer (Department of Economics, University of Waterloo)
    Abstract: This paper contributes to the analysis of the integration of immigrants in the Canadian labour market by focusing in two relatively new dimensions. We combine the large samples of the restricted version of the Canadian Census (1991-2006) with both a new measure of linguistic proximity of the immigrant’s mother tongue to that of the destination country, and with information of the occupational skills embodied in the jobs immigrants hold. This allows us to assess the role that language plays in the labour market performance of immigrants and to better study their career progression relative to the native born. Weekly wage differences between immigrants and the native born are driven mostly by penalties associated with immigrants’ lower returns to social skills, but not to analytical or manual skills. Linguistic proximity affects the types of jobs immigrant hold. The influence of linguistic proximity on the skill content of jobs immigrants hold over time and the associated wages also varies by the educational level of the migrant. Low linguistic proximity between origin and destination language imposes larger wage penalties to the university-educated, and more significantly affects the status of the jobs they hold.
    JEL: J15 J24 J31 J61 F22
    Date: 2015–12
  6. By: Mayda, Anna Maria; Peri, Giovanni; Steingress, Walter
    Abstract: We empirically analyze the impact of immigration to the U.S. on the share of votes to the Republicans and Democrats between 1994 and 2012. Our analysis is based on variation across states and years – using data from the Current Population Survey merged with election data – and addresses the endogeneity of immigrant flows using a novel set of instruments. On average across election types, immigration to the U.S. has a significant and negative impact on the Republican vote share, consistent with the typical view of political analysts in the U.S.. This average effect – which is driven by elections in the House – works through two main channels. The impact of immigration on Republican votes in the House is negative when the share of naturalized migrants in the voting population increases. Yet, it can be positive when the share of non-citizen migrants out of the population goes up and the size of migration makes it a salient policy issue in voters’ minds. These results are consistent with naturalized migrants being less likely to vote for the Republican party than native voters and with native voters’ political preferences moving towards the Republican party because of high immigration of non-citizens. This second effect, however, is significant only for very high levels of immigrant presence.
    Keywords: Citizenship; Elections; Immigration; Republican Party
    JEL: F22 J61
    Date: 2015–12
  7. By: Schiff, Maurice (World Bank)
    Abstract: Is ability drain (AD) economically significant? That immigrants or their children founded over 40% of the Fortune 500 US companies suggests it is. Moreover, brain drain (BD) induces a brain gain (BG). This cannot occur with ability. Nonetheless, while BD has been studied extensively, AD drain has not. I examine migration's impact on ability (a), education (h), and productive human capital or 'skill' (s) – which includes both a and h – for source country residents and migrants, under the points system (PS), 'vetting' system (VS), which accounts for s (e.g., US H1-B visa), and 'new' points system (NS), which combines PS and VS (e.g., Canada, 2015+). I find that i) Migration reduces (raises) source country residents' (migrants') average ability and has an ambiguous (positive) impact on their average education and skill, with a net skill drain more likely than a net BD; ii) AD is greater than BD; iii) the effects increase with ability's inequality or variance V(a); iv) the policies in turn raise V(a), V(h) and V(s), with V(a) > V(h); v) effects in i) - iv) are larger under VS than PS; vi) residents' (migrants') consumption is lower (higher) under either policy than under a closed economy; vii) consumption falls with ability's inequality; viii) contrary to the situation with education and skill, consumption inequality is lower under VS than PS; viii) ability, education and skill (consumption) under NS are identical (is larger than) the combined values under PS and VS. Orders of magnitude, empirical research plans, and policy implications are provided.
    Keywords: migration, points system, vetting system, ability drain, brain drain, brain gain
    JEL: F22 J24 J61 O15
    Date: 2015–12
  8. By: Mehtap Akguc (Research and Finance, Centre for European Policy Studies); Ana Ferrer (Department of Economics, University of Waterloo)
    Abstract: Using a recent survey of immigrants to France, we provide a detailed analysis of the educational attainment and labor market performance of various sub-population groups in France. Our results indicate that immigrants to France are less educated than the native born and that these differences can be tracked down to differences in socioeconomic background for most groups of immigrants. Similarly, there is a significant wage gap between immigrant and native-born workers regardless of gender, but this is reduced and sometimes disappears after correcting for selection into employment. In most cases the remaining differences in education and labor market outcomes seem related to the area of origin of the immigrant as well as where the education of the immigrant is obtained.
    JEL: F22 J61
    Date: 2015–02
  9. By: Efendic, Nedim (Stockholm School of Economics); Andersson, Fredrik W. (Statistics Sweden); Wennberg, Karl (Institute for Analytical Sociology (IAS) & Department of Management and Engineering Linköping University, Sweden and Ratio Institute)
    Abstract: Despite the burgeoning literature on immigrant entrepreneurship, there is a dearth of research on the social and economic factors shaping the performance of immigrant-run firms. Drawing upon human and social capital theory and assimilation theory, we investigate differences in performance measured as revenue growth in a comparative study of native and immigrant CEOs. Following 50,002 small firms in Sweden over four years, we find distinct patterns in both firm size and revenue growth between firms managed by immigrants and by natives. While firms run by second-generation immigrants from OECD countries exhibit higher growth rates than natives, the reverse is true for second generation immigrants from non-OECD countries, suggesting that economic integration in terms of immigrants’ small business growth in Sweden is characterized by segmented rather than universal assimilation.
    Keywords: Immigrant entrepreneurship; intergenerational differences; firm growth; Sweden
    JEL: J61 M13 O18
    Date: 2015–12–23
  10. By: Camacho, Carmen (Paris School of Economics); Mariani, Fabio (Université catholique de Louvain); Pensieroso, Luca (IRES, Université catholique de Louvain)
    Abstract: We build a general equilibrium model in which both illegal immigration and the size of the informal sector are endogenously determined. In this framework, we show that indirect policy measures such as tax reduction and detection of informal activities can be used as substitutes for border enforcement, in order to contrast illegal immigration. We also find that a welfare-maximising Government that includes illegal immigration in its objective function, instead of focusing on the well-being of native workers only, will set the tax rate to a lower value.
    Keywords: illegal immigration, informal sector, shadow economy, taxation, immigration policy
    JEL: O17 F22 J61
    Date: 2015–12
  11. By: Alicia Adsera (Woodrow Wilson School of International and Public Affairs, Princeton University); Ana Ferrer (Department of Economics, University of Waterloo)
    Abstract: We use the confidential files of the 1991-2006 Canadian Census, combined with information from O*NET on the skill requirements of jobs, to explore whether immigrant women behave as secondary workers, remaining marginally attached to the labour market and experiencing little career progression over time. Our results show that the labour market patterns of female immigrants to Canada do not fit this profile, but rather conform to patterns recently exhibited by married native women elsewhere, with rising participation and wage progression. At best, only relatively uneducated immigrant women in unskilled occupations may fit the profile of secondary workers, with slow skill mobility and low-status job-traps. Educated immigrant women, on the other hand, experience skill assimilation over time: a reduction in physical strength and an increase in analytical skills required in their jobs relative to those of natives.
    JEL: J01 J61 F22
    Date: 2015–12
  12. By: Barbara Dietz (IZA Bonn); Kseniia Gatskova; Artjoms Ivlevs
    Abstract: We study the relationship between migration and children’s education in Tajikistan – one of the poorest and most remittance-dependent economies in the world. The analysis of a unique three-wave household panel survey reveals that emigration of family members is negatively associated with children’s school attendance. Receiving remittances does not offset this negative effect. Migration of non-parent family members (such as siblings) is particularly detrimental to school attendance, especially among older children and children from less educated households. This supports a conjecture that emigration in Tajikistan has a negative signaling effect on the education of children staying behind.
    Keywords: migration, remittances, schooling, Tajikistan
    Date: 2015–11
  13. By: Jadotte, Evans (World Bank); Ramos, Xavi (Universitat Autònoma de Barcelona)
    Abstract: We examine the labour supply effect of remittances in the Republic of Haiti, the prime international remittances recipient country in the Latin American and Caribbean (LAC) region relative to its GDP. Unlike previous empirical literature we address three econometric issues that may bias the estimates. We account for endogeneity of the remittances with respect to labour supply, for the zero-inflated nature of our dependent variable, hours of work, and for the self-selection of the migrant sample. Our results are in line with previous literature, and point to a decline of labour supply in the presence of remittances. However, contrary to previous findings, the labour market response to remittances of female household heads is not as sensitive as male's.
    Keywords: international migration, remittances, labour supply, Republic of Haiti
    JEL: C39 F22 F24 J22
    Date: 2015–12
  14. By: Fredriksen, Lars (Aarhus university); Wennberg, Karl (Institute for Analytical Sociology (IAS) & Department of Management and Engineering Linköping University, Sweden and Ratio Institute); Balachandran, Chanchal (Linköping unievrsity)
    Abstract: Knowledge-based theories of entrepreneurship infer transfer of knowledge from the effect of labor mobility on entrepreneurial entry. Yet, simple selection or situational mechanisms that do not imply knowledge transfer may influence entrepreneurial entry in similar ways. We argue that the extent to which such alternative mechanisms operate, labor mobility predicts entry but not subsequent performance for entrepreneurs. Analyses of matched employee-employer data from Sweden suggest that high rates of geographical and industry mobility increase individuals’ likelihood of entrepreneurial entry but have no effects on their entrepreneurial performance, indicating that the relationship between labor mobility and entrepreneurial entry not necessarily implies knowledge transfer.
    Keywords: Entrepreneurship; Mobility; Knowledge
    JEL: J61 M13 O18
    Date: 2015–12–23

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