nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2018‒08‒20
seventeen papers chosen by
Yuji Tamura
La Trobe University

  1. Location as an Asset By Bilal, Adrien; Rossi-Hansberg, Esteban
  2. Skills, Migration, and Urban Amenities over the Life Cycle By David Albouy; Jason Faberman
  3. Is Brain Drain passé? The Optimal Timing of Migration By Elise S. Brezis
  4. Racial Heterogeneity and Local Government Finances: Evidence from the Great Migration By Marco Tabellini
  5. Gifts of the Immigrants, Woes of the Natives: Lessons from the Age of Mass Migration By Marco Tabellini
  6. Happily Ever After: Immigration, Natives’ Marriage, and Fertility By Michela Carlana; Marco Tabellini
  7. Spatial competition for students: what does (not) matter? By Diogo Lourenço; Carla Sá
  8. High-Skill Immigration, Innovation, and Creative Destruction By Gaurav Khanna; Munseob Lee
  9. Who remits and why? Evidence on internal migrant remittances from Vietnam and Thailand By Sharma, Rasadhika; Grote, Ulrike
  10. Immigration and Government Spending in OECD Countries By Hippolyte D'Albis; Ekrame Boubtane; Dramane Coulibaly
  11. Getting Incentives Right: The economic and social determinants of migrants’ well-being during the global financial crisis By Alexander M. Danzer; Barbara Dietz
  12. International Migration and Regional Housing Markets: Evidence from France By Hippolyte D'Albis; Dramane Coulibaly; Ekrame Boubtane
  13. Hispanics in the U.S. Labor Market: A Tale of Three Generations By Orrenius, Pia M.; Zavodny, Madeline
  14. Immigration and Redistribution By Alberto Alesina; Armando Miano; Stefanie Stantcheva
  15. Forced Migration and Human Capital: Evidence from Post-WWII Population Transfers By Sascha O. Becker; Irena Grosfeld; Pauline Grosjean; Nico Voigtländer; Ekaterina Zhuravskaya
  16. The Political Economy of Trade and Migration: Evidence from the U.S. Congress By Paola Conconi; Giovanni Facchini; Max F. Steinhardt; Maurizio Zanardi
  17. Behavior in reverse: Reasons for return migration By Stark, Oded

  1. By: Bilal, Adrien; Rossi-Hansberg, Esteban
    Abstract: The location of individuals determines their job opportunities, living amenities, and housing costs. We argue that it is useful to conceptualize the location choice of individuals as a decision to invest in a `location asset'. This asset has a cost equal to the location's rent, and a payoff through better job opportunities and, potentially, more human capital for the individual and her children. As with any asset, savers in the location asset transfer resources into the future by going to expensive locations with good future opportunities. In contrast, borrowers transfer resources to the present by going to cheap locations that offer few other advantages. As in a standard portfolio problem, holdings of this asset depend on the comparison of its rate of return with that of other assets. Differently from other assets, the location asset is not subject to borrowing constraints, so it is used by individuals with little or no wealth that want to borrow. We provide an analytical model to make this idea precise and to derive a number of related implications, including an agent's mobility choices after experiencing negative income shocks. The model can rationalize why low wealth individuals locate in low income regions with low opportunities even in the absence of mobility costs. We document the investment dimension of location, and confirm the core predictions of our theory with French individual panel data from tax returns.
    JEL: D14 E21 J61 R23
    Date: 2018–07
  2. By: David Albouy (University of Illinois); Jason Faberman (Federal Reserve Bank of Chicago)
    Abstract: We explore how much sorting across cities based on worker skill is driven by a desire to live in high-amenity cities, and if so, whether this sorting has a life-cycle component. We use data from the restricted-access geocode files for three cohorts of the National Longitudinal Surveys of Youth (NLSY), supplemented with data on time use and household expenditures. We estimate a quality of life index, which captures the degree of local amenities and labor productivity within a metropolitan area, using the methodology from Albouy (2012, 2016). We find that, like consumption expenditures, the average quality of life of an individual’s metropolitan area is hump-shaped over the life cycle, though it peaks much earlier. The observed life-cycle changes in average quality of life reflect migration decisions. Variations in average quality of life are driven primarily by changes in local amenities (and are reflected in changing housing prices across metropolitan areas) and are largest for the high skilled. We argue that the early hump-shape in quality of life reflects a bunch of amenity demand towards the earlier stages of the life cycle, and that this bunching is driven by expectations of child rearing, which diminishes the household’s demand for local amenities. We present evidence on time use and expenditures over the life cycle to support this argument. Time and income spent on local amenities is U-shaped over the life cycle (i.e., highest prior to having children and during retirement), and they are highest for the high skilled. In contrast, time and income spent on leisure activities at home are constant over the life cycle, and are highest for the low skilled. Thus, migration decisions have both a sorting component, which is driven in part by the desire to live in high-amenity cities, and a life-cycle component, which is driven by the presence of household children.
    Date: 2018
  3. By: Elise S. Brezis (Bar-Ilan University)
    Abstract: This paper sheds a new perspective on models of migration by integrating in a same structure the decisions about education and work; and by incorporating return migration with ‘brain waste’. Brain waste is defined as the depreciation, due to migration, in the human capital acquired in the home country. This paper shows that brain waste, and return migration have significant effects on the optimal strategy of migration. Without these elements, brain drain is usually an optimal solution. But, when we introduce brain waste, then it is optimal to migrate as a student. Therefore, brain waste can explain why brain drain is not always optimal.
    Keywords: Labor mobility; Brain drain; Brain Waste; Psychological costs; Higher education; Mismatch Costs; Return Migration; Quality of education.
    JEL: F22 I23 J24
    Date: 2018–02
  4. By: Marco Tabellini (Harvard Business School, Business, Government and the International Economy Unit)
    Abstract: Is racial heterogeneity responsible for the distressed financial conditions of US central cities and for their limited ability to provide even basic public goods? If so, why? I study these questions in the context of the first wave of the Great Migration (1915-1930), when more than 1.5 million African Americans moved from the South to the North of the United States. Black inflows and the induced white outflows ("white flight") are both instrumented for using, respectively, pre-migration settlements and their interaction with MSA geographic characteristics that affect the cost of moving to the suburbs. I find that black in-migration imposed a strong, negative fiscal externality on receiving places by lowering property values and, mechanically, reducing tax revenues. Unable or unwilling to raise tax rates, cities cut public spending, especially in education, to meet a tighter budget constraint. While the fall in tax revenues was partly offset by higher debt, this strategy may, in the long run, have proven unsustainable, contributing to the financially distressed conditions of several US central cities today.
    JEL: H41 J15 N32
    Date: 2018–07
  5. By: Marco Tabellini (Harvard Business School, Business, Government and the International Economy Unit)
    Abstract: In this paper, I show that political opposition to immigration can arise even when immigrants bring significant economic prosperity to receiving areas. I exploit exogenous variation in European immigration to US cities between 1910 and 1930 induced by World War I and the Immigration Acts of the 1920s, and instrument immigrants' location decision relying on pre-existing settlement patterns. Immigration increased natives' employment and occupational standing, and fostered industrial production and capital utilization. However, despite these economic benefits, it triggered hostile political reactions, such as the election of more conservative legislators, higher support for anti-immigration legislation, and lower public goods provision. Stitching the economic and the political results together, I provide evidence that natives' backlash was, at least in part, due to cultural differences between immigrants and natives, suggesting that diversity might be economically beneficial but politically hard to manage.
    Keywords: Immigration; Political Backlash; Age of Mass Migration; Cultural Diversity
    JEL: J15 J24 N32
    Date: 2018–07
  6. By: Michela Carlana (Harvard Kennedy School); Marco Tabellini (Harvard Business School, Business, Government and the International Economy Unit)
    Abstract: In this paper, we study the effects of immigration on natives' marriage, fertility, and family formation across US cities between 1910 and 1930. Instrumenting immigrants' location decision by interacting pre-existing ethnic settlements with aggregate migration flows, we find that immigration raised marriage rates, the probability of having children, and the propensity to leave the parental house for young native men and women. We show that these effects were driven by the large and positive impact of immigration on native men's employment and occupational standing, which increased the supply of "marriageable men". We also explore alternative mechanisms - changes in sex ratios, natives' cultural responses, and displacement effects of immigrants on female employment - and provide evidence that none of them can account for a quantitatively relevant fraction of our results.
    JEL: J12 J13 J61 N32
    Date: 2018–07
  7. By: Diogo Lourenço (Faculdade de Economia Universidade do Porto); Carla Sá (Escola de Economia e Gestão Universidade do Minho)
    Abstract: Regional cohesion and competition for students has fostered interest in the decision-making process behind the selection of institution of higher education. We use a gravity model to estimate the impact of distance, socioeconomic profile of districts, and characteristics of higher education institutions on the migratory flows of candidates to undergraduate programmes in Portugal. Elasticity to distance is found to be close to -2, in line with the gravity equation. The characteristics of the district of destination are unimportant, contrasting with the characteristics of institutions. Indeed, we find a negative impact of graduate unemployment, a more than proportional impact of the number of vacancies, and a great advantage to universities when compared with polytechnics. Regarding the district of origin, outgoing flows are lower the greater the local supply of higher education and the larger the young population.
    Keywords: Gravity Models; Student Mobility; Institutional Competition
    JEL: I23 R23 O15
    Date: 2018–07
  8. By: Gaurav Khanna; Munseob Lee
    Abstract: Economists have identified product entry and exit as a primary channel through which innovation impacts economic growth. In this paper, we document how high-skill immigration affects product reallocation (entry and exit) at the firm level. Using data on H-1B Labor Condition Applications (LCAs) matched to retail scanner data on products and Compustat data on firm characteristics, we find that H-1B certification is associated with higher product reallocation and revenue growth. A ten percent increase in the share of H-1B workers is associated with a two percent increase in product reallocation rates -- our measure of innovation. These results shed light on the economic consequences of innovation by high-skill immigrant to the United States.
    JEL: D22 D24 F22 J61
    Date: 2018–07
  9. By: Sharma, Rasadhika; Grote, Ulrike
    Abstract: The paper analyses determinants and motivations of internal migrant remittances based on a unique data set that combines a household survey from three provinces in Vietnam and Thailand with a migrant tracing survey that was conducted in Ho Chi Minh City and the Greater Bangkok area. Using the Heckman model, we find that human capital, stronger family ties and better living conditions positively influence the migrant’s decision to remit. In terms of the amount remitted, migrants engaged in the service sector remit lower shares of their income and remittances decrease as the household wealth increases. Furthermore, we explore the behavioral side of remittances by constructing proxy groups that represent each strand of migrant’s motivation for remitting. We examine the relationship of these proxy groups and remittances to conclude that exchange or loan repayment motive underpinned by altruism is the strongest motivation in our case.
    Keywords: Remittances, Altruism, Self-interest, Heckman model, Thailand, Vietnam
    JEL: F24 J61 O53 D90
    Date: 2018–08
  10. By: Hippolyte D'Albis (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Ekrame Boubtane (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Dramane Coulibaly (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper evaluates the fiscal effect of international migration. It first estimates a structural Vector Autoregressive model on a panel of 19 OECD countries over the period 1980-2015, in order to quantify the impact of a migration shock. Empirical results suggest that international migration had a positive impact on the economic and fiscal performance of OECD countries. It then proposes an original theoretical framework that highlights the importance of both the demographic structure and the intergenerational public transfers. Hence, OECD countries seems to have benefited from a \demographic dividend" of international migration since 1980.
    Keywords: Immigration,public spending,overlapping-generation model,panel VAR
    Date: 2018–08
  11. By: Alexander M. Danzer (KU Eichstätt-Ingolstadt); Barbara Dietz
    Abstract: This paper investigates the economic and social determinants affecting the well-being of temporary migrants before, during and after the financial crisis. Exploiting unique panel data which cover migration spells from Tajikistan between 2001 and 2011, we find that migrants earn less but stay longer in the destination during the crisis; at the same time, they become more exposed to illegal work relations, harassment and deportation through the Russian authorities. Especially illegal employment has negative second order effects on wages. Despite the similarities in the demographics and jobs of migrant workers, we find substantial heterogeneity in how the financial crisis affects their well-being. Migrants who experience wage losses during the crisis rationally stop migrating.
    Keywords: Global financial crisis, migration, migrants’ well-being
    JEL: O15 F22
    Date: 2018–01
  12. By: Hippolyte D'Albis (PSE - Paris School of Economics); Dramane Coulibaly (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Ekrame Boubtane (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This article examines the causal relations between non-European immigration and the characteristics of the housing market in host regions. We constructed a unique database from administrative records and used it to assess annual migration flows into France's 22 administrative regions from 1990 to 2013. We then estimated various panel VAR models, taking into account GDP per capita and the unemployment rate as the main regional economic indicators. We find that immigration has no significant effect on property prices, but that higher property prices significantly reduce immigration rates. We also find no significant relationship between immigration and social housing supply.
    Keywords: immigration, property prices, social housing, panel VAR
    Date: 2017–02–16
  13. By: Orrenius, Pia M. (Federal Reserve Bank of Dallas); Zavodny, Madeline (University of North Florida)
    Abstract: Immigrants’ descendants typically assimilate toward mainstream social and economic outcomes across generations. Hispanics in the United States are a possible exception to this pattern. Although there is a growing literature on intergenerational progress, or lack thereof, in education and earnings among Hispanics, there is little research on employment differences across immigrant generations. Using data from 1996 to 2017, this study reveals considerable differences in Hispanics’ employment rates across immigrant generations. Hispanic immigrant men tend to have higher employment rates than non-Hispanic whites and second- and third-plus generation Hispanics. Hispanic immigrant women have much lower employment rates, but employment rates rise considerably in the second generation. Nonetheless, U.S.-born Hispanic women are less likely than non-Hispanic white women to work. The evidence thus suggests segmented assimilation, in which the descendants of Hispanic immigrants have worse outcomes across generations. While relatively low education levels do not appear to hamper Hispanic immigrants’ employment, they play a key role in explaining low levels of employment among Hispanic immigrants’ descendants. Race and selective ethnic attrition may also contribute to some of the patterns uncovered here.
    Keywords: Hispanics; immigrant generations; assimilation
    JEL: E24 J11 J15
    Date: 2018–05–01
  14. By: Alberto Alesina; Armando Miano; Stefanie Stantcheva
    Abstract: We design and conduct large-scale surveys and experiments in six countries to investigate how natives' perceptions of immigrants influence their preferences for redistribution. We find strikingly large biases in natives' perceptions of the number and characteristics of immigrants: in all countries, respondents greatly overestimate the total number of immigrants, think immigrants are culturally and religiously more distant from them, and are economically weaker – less educated, more unemployed, poorer, and more reliant on government transfers – than is the case. While all respondents have misperceptions, those with the largest ones are systematically the right-wing, the non-college educated, and the low-skilled working in immigration-intensive sectors. Support for redistribution is strongly correlated with the perceived composition of immigrants – their origin and economic contribution – rather than with the perceived share of immigrants per se. Given the very negative baseline views that respondents have of immigrants, simply making them think about immigration in a randomized manner makes them support less redistribution, including actual donations to charities. We also experimentally show respondents information about the true i) number, ii) origin, and iii) “hard work” of immigrants in their country. On its own, information on the “hard work” of immigrants generates more support for redistribution. However, if people are also prompted to think in detail about immigrants' characteristics, then none of these favorable information treatments manages to counteract their negative priors that generate lower support for redistribution.
    JEL: D71 D72 H2
    Date: 2018–06
  15. By: Sascha O. Becker; Irena Grosfeld; Pauline Grosjean; Nico Voigtländer; Ekaterina Zhuravskaya
    Abstract: We exploit a unique historical setting to study the long-run effects of forced migration on investment in education. After World War II, the Polish borders were redrawn, resulting in large-scale migration. Poles were forced to move from the Kresy territories in the East (taken over by the USSR) and were resettled mostly to the newly acquired Western Territories, from which Germans were expelled. We combine historical censuses with newly collected survey data to show that, while there were no pre-WWII differences in education, Poles with a family history of forced migration are significantly more educated today. Descendants of forced migrants have on average one extra year of schooling, driven by a higher propensity to finish secondary or higher education. This result holds when we restrict ancestral locations to a subsample around the former Kresy border and include fixed effects for the destination of migrants. As Kresy migrants were of the same ethnicity and religion as other Poles, we bypass confounding factors of other cases of forced migration. We show that labor market competition with natives and selection of migrants are also unlikely to drive our results. Survey evidence suggests that forced migration led to a shift in preferences, away from material possessions and towards investment in a mobile asset – human capital. The effects persist over three generations.
    JEL: D74 I25 N33 N34
    Date: 2018–06
  16. By: Paola Conconi; Giovanni Facchini; Max F. Steinhardt; Maurizio Zanardi
    Abstract: We systematically examine the drivers of U.S. congressmen's votes on trade and migration reforms since the 1970's. Standard trade theory suggests that reforms that lower barriers to goods and migrants should have similar distributional effects, hurting low-skilled U.S. workers while benefiting high-skilled workers. In line with this prediction, we find that House members representing more skilled-labor abundant districts are more likely to support both trade and migration liberalization. Still, important differences exist: Democrats favor trade reforms less than Republicans, while the opposite is true for immigration reforms; welfare state considerations and network effects shape support for immigration, but not for trade.
    Keywords: trade reforms, immigration reforms, roll-call votes
    JEL: F1 F22
    Date: 2018–08
  17. By: Stark, Oded
    Abstract: Received research shows numerous motives for migration, but fewer reasons for return migration. This paper aims to correct this imbalance. Twelve reasons for return migration are presented and discussed briefly. The reasons listed are derived from research on migration conducted by the author in the course of the past three and a half decades. The purpose of the paper is to pull together the insights gained from that research so as to formulate a base for future inquiry, both analytical and empirical. In addition, just as research on motives for migration can help to establish the reasons for return migration, research on the latter can help to deepen understanding of the former. Moreover, in a great many circumstances and for a variety of reasons, countries that host migrants may want them to leave. In such circumstances, enacting policies that align with motives for return migration will be more efficient than devising measures that are independent of these motives.
    Keywords: reasons for return migration
    JEL: F22 F24 I31 J61
    Date: 2018

This nep-mig issue is ©2018 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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.