nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2018‒12‒17
twenty-two papers chosen by
Yuji Tamura
La Trobe University

  1. Taking the Skill Bias out of Global Migration By Costanza Biavaschi; Micha? Burzynski; Benjamin Elsner; Joël Machado
  2. Immigrant Voters, Taxation and the Size of the Welfare State By Arnaud Chevalier; Benjamin Elsner; Andreas Lichter; Nico Pestel
  3. The risk of psychological distress among unemployed and underemployed Latin-American immigrants in the US and in their countries of origin By Maritza Caicedo; Edwin van Gameren; Catalina Amuedo-Dorantes
  4. The Financial Decisions of Immigrant and Native Households: Evidence from Italy By Graziella Bertocchi; Marianna Brunetti; Anzelika Zaiceva
  5. Decomposing the impact of immigration on house prices By Rosa Sanchis-Guarner
  6. Making the most of immigration in Canada By David Carey
  7. Health care utilization of refugees By Thomas Schober; Katrin Zocher
  8. Anti-Migration as a Threat to Internationalization? A Review of the Migration- Internationalization Literature By Hatzigeorgiou, Andreas; Lodefalk, Magnus
  9. Relocation of the rich: migration in response to top tax rate changes from Spanish reforms By David R. Agrawal; Dirk Foremny
  10. On the Origin of the German East-West Population Gap By Christoph Eder; Martin Halla
  11. The Rational Public? Internal Migration and Collective Opinion about the European Union By Anne Marie Jeannet
  12. Goals and Gaps: Educational Careers of Immigrant Children By Michela Carlana; Eliana La Ferrara; Paolo Pinotti
  13. How admitting migrants with any skills can help overcome a shortage of workers with particular skills By Stark, Oded; Byra, Lukasz
  14. Gravity and Migration before Railways: Evidence from Parisian Prostitutes and Revolutionaries By Morgan Kelly; Cormac Ó Gráda
  15. Housing Tenure, Geographical Mobility and the Labour Market: the Role of the Employment Exit Rate By Vives Coscojuela, Cecilia
  16. How do the educational attainment and labour market outcomes of foreign-born adults compare to their native-born peers? By OECD
  17. Community cohesion and assimilation equilibria By Stark, Oded; Jakubek, Marcin; Szczygielski, Krzysztof
  18. The Role of Institutions and Immigrant Networks in Firms’ Offshoring Decisions By Simone Moriconi; Giovanni Peri; Dario Pozzoli
  19. Teachers' impact on Facilitating Intercultural Relationships among Primary School Students By Lucia Bombieri
  20. Heterogeneous Workers, Trade, and Migration By Inga Heiland; Wilhelm Kohler
  21. Border Walls By Treb Allen; Cauê de Castro Dobbin; Melanie Morten
  22. Financing Refugee Hosting Contexts: An analysis of the DAC’s contribution to burden- and responsibility-sharing in supporting refugees and their host communities By Kathleen Forichon

  1. By: Costanza Biavaschi; Micha? Burzynski; Benjamin Elsner; Joël Machado
    Abstract: Global migration is heavily skill-biased, with tertiary-educated workers being four times more likely to migrate than workers with a lower education. In this paper, we quantify the global impact of this skill bias in migration. Based on a quantitative multi-country model with trade, we compare the current world to a counterfactual with the same number of migrants, where all migrants are neutrally selected from their countries of origin. We find that most receiving countries benefit from the skill bias in migration, while a small number of sending countries is significantly worse off. The negative effect in many sending countries is completely eliminated — and often reversed — once we account for remittances and additional migration-related externalities. In a model with all our extensions, the average welfare effect of skill-biased migration in both OECD and non-OECD countries is positive.
    Keywords: Migration; Skill selection; Global welfare
    JEL: F22 O15 J61
    Date: 2018–05
  2. By: Arnaud Chevalier; Benjamin Elsner; Andreas Lichter; Nico Pestel
    Abstract: This paper studies the impact of immigration on public policy setting. As a natural experiment, we exploit the sudden arrival of eight million forced migrants in West Germany after World War II. These migrants were on average poorer than the West German population, but unlike most international migrants they had full voting rights and were eligible for social welfare. Using panel data for West German cities and applying difference-in-differences and an instrumental variables approach, we show that local governments responded to this migration shock with selective and persistent tax raises as well as shifts in spending. In response to the inflow, farm and business owners were taxed more while residential property and wage bill taxes were left unchanged. Moreover, high-inflow cities significantly raised welfare spending while reducing spending on infrastructure and housing. Election data suggest that these policy changes were partly driven by the political influence of the immigrants: in high-inflow regions, the major parties were more likely to nominate immigrants as candidates, and a pro-immigrant party received high vote shares. We further document that this episode of mass immigration had lasting effects on people’s preferences for redistribution. In areas with larger inflows in the 1940s, people have substantially higher demand for redistribution more than 50 years later.
    Keywords: Migration; Taxation; Spending; Welfare state
    JEL: J61 H25
    Date: 2018–08
  3. By: Maritza Caicedo (Instituto de Investigaciones Sociales, UNAM); Edwin van Gameren (El Colegio de México); Catalina Amuedo-Dorantes (San Diego State University)
    Abstract: We compare unemployed and underemployed immigrants from Mexico, Colombia, and the Dominican Republic in the US with people living under similarly precarious employment conditions in the countries of origin, in order to understand better differences in psychological distress. In doing so, we deviate from and add to the literature on the Hispanic Health Paradox, addressing heterogeneity between Hispanics and comparison with people in the sending country instead of the US-based population. We follow a mixed research strategy, performing and analyzing a survey, and by organizing focus groups, allowing for a profound analysis of the importance of both objective and subjective characteristics. We find that a more precarious socioeconomic situation, financial tensions, and a reduced labor satisfaction increase depression and anxiety levels. Mexican immigrants report fewer symptoms than those in Mexico City, but this difference disappears when controlling for differences in labor conditions and the importance respondent give to work. Colombian immigrants, generally in more favorable conditions than other immigrants, report more distress than their counterparts in Colombia. Subjective factors including the intentions of migration appear relevant for the reported distress. Importantly, we encounter ambiguity regarding the connotation respondents have with symptoms of depression and anxiety.
    Keywords: immigrants, countries of origin, unemployment, underemployment, psychological distress, depression, anxiety, qualitative research, Mexico, Colombia, Dominican Republic.
    JEL: J15 J61 Z13 I14 N36
    Date: 2018–11
  4. By: Graziella Bertocchi; Marianna Brunetti; Anzelika Zaiceva
    Abstract: Using rich Italian data for the period 2006-2014, we document sizeable gaps between native and immigrant households with respect to wealth holdings and financial decisions. Immigrant household heads hold less net wealth than native, but only above the median of the wealth distribution, with housing as the main driver. Immigrant status reduces the likelihood of holding risky assets, housing, mortgages, businesses, and valuables, while it increases the likelihood of financial fragility. Years since migration, countries of origin, and the pattern of intermarriage also matter. The Great Recession has worsened the condition of immigrants in terms of wealth holdings, home ownership, and financial fragility
    Keywords: immigrants, household finance, wealth, financial portfolios, Great Recession.
    JEL: F22 G11 D14 E21 J15
    Date: 2018–11
  5. By: Rosa Sanchis-Guarner (Centre for Economic Performance at the London School of Economics & the CESifo Research Network)
    Abstract: An inflow of immigrants into a region impacts house prices in three ways. For a fixed level of local population, housing demand rises due to the increase in foreign-born population. In addition, immigrants can influence native location decisions and induce additional shifts in demand. Finally, changes in housing supply conditions can in turn affect prices. Existing reduced form estimates of the effect of immigration on house prices capture the sum of all these effects. In this paper I propose a methodology to identify the different channels driving the total effect. I show that, conditional on supply, total changes in housing demand can be decomposed into the sum of direct immigrant demand and indirect demand changes from relocated population. The size and sign of the indirect demand effect depends on the impact of immigration on native mobility. I use Spanish data during the period 2001-2012 to estimate the different elements of the decomposition, applying an instrumental variables strategy to obtain consistent coefficients. The results show that overlooking the impact of immigration on native location induces a sizeable difference between the total and the immigrant demand effects, affecting the interpretation of the estimates.
    Keywords: Immigration, housing, Spain, instrumental variables
    JEL: J61 R12 R21
    Date: 2017
  6. By: David Carey
    Abstract: Canada’s immigration policy aims to promote economic development by selecting immigrants with high levels of human capital, to reunite families and to respond to foreign crises and offer protection to endangered people. Economic-class immigrants, who are selected for their skills, are by far the largest group. The immigration system has been highly successful and is well run. Outcomes are monitored and policies adjusted to ensure that the system’s objectives are met. A problematic development, both from the point of view of immigrants’ well-being and increasing productivity, is that their initial earnings in Canada relative to the native-born fell sharply in recent decades to levels that are too low to catch up with those of the comparable native-born within immigrants’ working lives. Important causes of the fall include weaker official language skills and a decline in returns to pre-immigration labour market experience. Canada has responded by modifying its immigration policy over the years to select immigrants with better earnings prospects, most recently with the introduction in 2015 of the Express Entry system. It has also developed a range of settlement programmes and initiatives to facilitate integration. This chapter looks at options for further adjusting the system to enhance the benefits it generates.
    Keywords: debt, discrimination, government budgets, immigration, integration, points system, productivity, refugees, skills
    JEL: F22 J15 J24 J6 J71
    Date: 2018–12–11
  7. By: Thomas Schober; Katrin Zocher (JKU, Austria)
    Abstract: European countries experienced significant inflows of migrants in the past decade, including many refugees coming from regions engaged in armed conflicts. While previous research on migrant health largely focused on economic migration, empirical evidence on the health of refugees is sparse. We use administrative data from Austria to differentiate between economic migrants and refugees and analyze their health care expenditures in comparison to natives. The results distinctly show different expenditure patterns. Unlike economic migrants, we find substantially higher expenditures for refugees, most pronounced in the first year upon arrival. The difference is not explained by specific diseases or individual refugee groups, indicating a, generally, inferior health status. Further, by using the quasi-random placement of refugees as a natural experiment, we show that characteristics of the local health care sector do not have a significant effect on expenditure levels.
    Date: 2018–11
  8. By: Hatzigeorgiou, Andreas (Örebro University School of Business); Lodefalk, Magnus (Örebro University School of Business)
    Abstract: Does anti-migration sentiment threaten internationalization? One major pro-Brexit argument was that it would enable more control over immigration. The most recent US presidential election also focused on immigration. Anti-migration sentiment could be a threat to internationalization, given that migrants can help lower the costs of internationalization. Since trade contributes to economic growth, this could, in turn, impede economic development. Despite extensive literature on the migration-trade nexus, there are few examples of policymakers highlighting the role of migration for internationalization. One possible explanation is the absence of an accessible survey of the available theory and evidence on this relationship, and this article intends to bridge the gap. We review and discuss over 100 papers published on the subject, from pioneering country-level studies to nascent firm-level studies that utilize employer-employee data. To our knowledge, this is the first paper offering a wide-ranging review of the different strands of theory on the relationship between migration and internationalization, as well as new empirical findings. Although the evidence suggests that migration can facilitate internationalization we also note substantial gaps and inconsistencies in the extant literature. The aim of this article is to encourage future research and assist policymakers in their efforts to promote internationalization.
    Keywords: Migration; networks; information; trade; foreign direct investment
    JEL: D20 D80 F14 F16 F22 F23 J61
    Date: 2018–12–06
  9. By: David R. Agrawal (University of Kentucky & CESifo); Dirk Foremny (Universitat de Barcelona & Institut d’Economia de Barcelona (IEB))
    Abstract: A recent Spanish tax reform granted regions the authority to set income tax rates, resulting in substantial tax differentials. We use individual-level information from Social Security records over a period of one decade. Conditional on moving, taxes have a significant effect on location choice. A one percent increase in the net of tax rate for a region relative to others increases the probability of moving to that region by 1.7 percentage points. Focusing on the stock of top-taxpayers, we estimate an elasticity of the number of top taxpayers with respect to net-of-tax rates of 0.85. Using this elasticity, a theoretical model implies that the mechanical increase in tax revenue due to higher tax rates is larger than the loss in tax revenue from the out-flow of migration.
    Keywords: Migration, Taxes, Mobility, Rich, Fiscal Decentralization
    JEL: H24 H31 H73 J61 R23
    Date: 2018
  10. By: Christoph Eder; Martin Halla
    Abstract: The East-West gap in the German population is believed to originate from migrants escaping the socialist regime in the German Democratic Republic (GDR). We use newly collected regional data and the combination of a regression discontinuity design in space with a difference-in-differences approach to document that the largest part of this gap is due to a massive internal migration wave 3 years prior to the establishment of the GDR. The timing and spatial pattern of this migration movement suggest that the dominant motive was escaping physical assault by the Soviet army and not avoiding the socialist regime. The gap in population has remained remarkably sharp in space and is growing.
    Keywords: Institutions, wartime violence against civilians, regional migration, World War II, Germany, spatial distribution, regional economic activity
    JEL: N44 N94 R23 R11 R12 J61
    Date: 2018–11
  11. By: Anne Marie Jeannet
    Abstract: Pal though the European Union allows citizens from member countries to migrate freely within its confines to facilitate integration, it may be alienating public support for Europe. This paper investigates this by extending group threat theory to explain how internal migration influences mass public support using annual data from 1998 to 2014 across 15 Western European countries. We find that increases in the presence of foreigners from new member countries in Central and Eastern Europe have raised collective concerns about EU membership and there is some evidence that it may have eroded trust in European institutions as well. The results also show that this effect is exacerbated during an economic downturn. Our findings imply that collective opinion has responded ‘rationally’ to contextual changes in Europe’s internal migration patterns. The study concludes by discussing how group threat theory is relevant for understanding collective sentiment about the European Union.
    Keywords: Public Opinion, European Union, EU attitudes, immigration
    Date: 2017–05
  12. By: Michela Carlana; Eliana La Ferrara; Paolo Pinotti
    Abstract: We study the educational choices of children of immigrants in a tracked school system. We first show that immigrant boys in Italy enroll disproportionately into vocational high schools, as opposed to technical and academically-oriented high schools, compared to natives of similar ability. Immigrant girls, instead, choose similar schools as native ones. We then estimate the impact of a large-scale, randomized intervention providing tutoring and career counseling to high-ability immigrant students. Male treated students increase their probability of enrolling into the high track to the same level of natives, also closing the gap in terms of grade retention. There are no significant effects on immigrant females, who exhibit similar choices and performance as native ones in absence of the intervention. Increases in academic motivation and the resulting changes in teachers’ recommendation regarding high school choice explain a sizable portion of the effect, while the effect of increases in cognitive skills is negligible. Finally, we find positive spillovers on immigrant classmates of treated students, while there is no effect on native classmates.
    Keywords: tracking, career choice, immigrants, aspirations, mentoring
    Date: 2017–12
  13. By: Stark, Oded; Byra, Lukasz
    Abstract: A country that experiences a shortage of workers with particular skills naturally considers two responses: import skills or produce them. Skill import may result in large-scale migration, which will not be to the liking of the natives. Skill production will require financial incentives, which will not be to the liking of the ministry of finance. In this paper we suggest a third response: impose a substantial migration admission fee, "import" fee-paying workers regardless of their skills, and use the revenue from the fee to subsidize the acquisition of the required skills by the natives. We calculate the minimal fee that will remedy the shortage of workers with particular skills with fewer migrants than under the skill "import" policy.
    Keywords: Skill heterogeneity,Production externalities,Market inefficiency,Shortage of particular skills,Social planner's choice,"Import" of skills,A migration admission fee,Skill acquisition subsidy
    JEL: D62 F22 J24
    Date: 2018
  14. By: Morgan Kelly; Cormac Ó Gráda
    Abstract: Although urban growth historically depended on large inflows of migrants, little is known of the process of migration in the era before railways. Here we use detailed data for Paris on women arrested for prostitution in the 1760s, or registered as prostitutes in the 1830s and 1850s; and of men holding identity cards in the 1790s, to examine patterns of female and male migration. We supplement these with data on all women and men buried in 1833. Migration was highest from areas of high living standards, measured by literacy rates. Distance was a strong deterrent to female migration (reflecting limited employment opportunities) that falls with railways, whereas its considerably lower impact on men barely changes through the nineteenth century.
    Keywords: Migration; Gravity; Prostitution
    JEL: N
    Date: 2018–06
  15. By: Vives Coscojuela, Cecilia
    Abstract: This paper studies the effect of home-owners' migration costs on unemployment in an economy where workers move both for work- and non-work-related reasons. To this end, a search model with heterogeneous locations is developed and calibrated to the US economy. Both the employment and unemployment exit rates are endogenous. Migration costs imply that home-owners quit their jobs less often than renters and find jobs at a higher rate. Consistent with the empirical evidence, the model predicts that home-owners have a lower unemployment rate than renters.
    Keywords: unemployment, labour, mobility, home, ownership
    JEL: J61 J64 R23
    Date: 2018–11
  16. By: OECD
    Abstract: Adult migrants in all OECD countries are a diverse group, with different profiles and levels of education. Even if they hold tertiary degrees, they are more likely to have poorer labour market outcomes, including lower earnings. Participation in the labour market is more difficult for foreign-bornadults who arrived at a later age and acquired their qualifications in another country. It is important that host countries design and implement policies that will help immigrants improve their chances in their labour market, benefitting both the person and the country.
    Date: 2018–12–18
  17. By: Stark, Oded; Jakubek, Marcin; Szczygielski, Krzysztof
    Abstract: We study the assimilation behavior of a group of migrants who live in a city populated by native inhabitants. We conceptualize the group as a community, and the city as a social space. Assimilation increases the productivity of migrants and, consequently, their earnings. However, assimilation also brings the migrants closer in social space to the richer native inhabitants. This proximity subjects the migrants to relative deprivation. We consider a community of migrants whose members are at an equilibrium level of assimilation that was chosen as a result of the maximization of a utility function that has as its arguments income, the cost of assimilation effort, and a measure of relative deprivation. We ask how vulnerable this assimilation equilibrium is to the appearance of a "mutant" - a member of the community who is exogenously endowed with a superior capacity to assimilate. If the mutant were to act on his enhanced ability, his earnings would be higher than those of his fellow migrants, which will expose them to greater relative deprivation. We find that the stability of the pre-mutation assimilation equilibrium depends on the cohesion of the migrants' community, expressed as an ability to effectively sanction and discourage the mutant from deviating. The equilibrium level of assimilation of a tightly knit community is stable in the sense of not being vulnerable to the appearance of a member becoming better able to assimilate. However, if the community is loose-knit, the appearance of a mutant will destabilize the pre-mutation assimilation equilibrium, and will result in a higher equilibrium level of assimilation.
    Keywords: Community cohesion,Social proximity,Interpersonal comparisons,Relative deprivation,Migrants' assimilation behavior
    JEL: D70 J15 J24 J61 J70 O12 Z10
    Date: 2018
  18. By: Simone Moriconi; Giovanni Peri; Dario Pozzoli
    Abstract: The offshoring of production by multinational firms has expanded dramatically in recent decades, increasing these firms’ potential for economic growth and technological transfers across countries. What determines the location of offshore production? How do countries' policies and characteristics affect the firm’s decision about where to offshore? Do firms choose specific countries because of their policies or because they know them better? In this paper, we use a very rich dataset on Danish firms to analyze how decisions to offshore production depend on the institutional characteristics of the country and firm-specific bilateral connections. We find that institutions that enhance investor protection and reduce corruption increase the probability that firms offshore there, while those that increase regulation in the labor market decrease such probability. We also show that a firm’s probability of offshoring increases with the share of its employees who are immigrants from that country of origin.
    Keywords: offshoring, product market, labor regulations, networks, fixed start-up costs
    JEL: F16 J38 J24
    Date: 2018
  19. By: Lucia Bombieri (Higher School of Economics)
    Abstract: Migration floods have dramatically increased in frequency and numbers over the past two decades. The phenomenon is continually changing in characteristics and populations affected by it. The challenges they are posing are evolving, as well, and they demand a difficult shift in the host communities. The focus of this paper is on the key role teachers play in facilitating or impeding integration. We collected data in Italy among 5th-grade students (10-11 y.o.) observing how teachers' instructions and arised empathy can modulate the likeability, ingroup/outgroup identification and acculturation expectations toward a fictional immigrant peer. Results are still under processing, but at this preliminary stage the impact of both teachers and empathy seems to be confirmed, even though at different extents. Implications, limitations and future directions will be discussed.
    Keywords: teacher's role, immigration, empathy, integration
    JEL: I00 I24 J15
    Date: 2018–10
  20. By: Inga Heiland; Wilhelm Kohler
    Abstract: We develop a model that combines monopolistic competition on goods markets with skill-type heterogeneity on the labor market to analyze the effects of trade and migration on welfare and inequality. Skill-type heterogeneity and partial specificity to firms’ endogenously chosen skill requirements lead to endogenous worker-firm match quality, endogenous wage markups, and within-firm wage inequality. We identify novel effects of trade and migration. Trade enhances firms’ monopsony power on the labor market and worsens the average quality of worker-firm matches, but the gains from trade theorem survives. Integration of labor markets leads to two-way migration between symmetric countries. Migration enhances competitiveness on the labor market and tends to increase the average quality of worker-firm matches. Trade and migration are complements. Our model clearly advocates opening up labor markets simultaneously with trade liberalization.
    Keywords: two-way migration, gains from trade, heterogeneous workers
    JEL: F12 F16 F22 J24
    Date: 2018
  21. By: Treb Allen; Cauê de Castro Dobbin; Melanie Morten
    Abstract: What are the economic impacts of a border wall between the United States and Mexico? We use confidential data on bilateral flows of primarily unauthorized Mexican workers to the United States to estimate how a substantial expansion of the border wall between the United States and Mexico from 2007 to 2010 affected migration. We then combine these estimates with a general equilibrium spatial model featuring multiple labor types and a flexible underlying geography to quantify the economic impact of the wall expansion. At a construction cost of approximately $7 per person in the United States, we estimate that the border wall expansion harmed Mexican workers and high-skill U.S. workers, but benefited U.S. low-skill workers, who achieved gains equivalent to an increase in per capita income of $0.36. In contrast, a counterfactual policy which instead reduced trade costs between the United States and Mexico by 25% would have resulted in both greater declines in Mexico to United States migration and substantial welfare gains for all workers.
    JEL: F11 F22 J2 R23
    Date: 2018–11
  22. By: Kathleen Forichon
    Abstract: Protecting and supporting refugees is an important responsibility of the international community. The Global Compact on Refugees (GCR) was proposed in 2018 to establish a more predictable and equitable sharing of burdens and responsibilities among United Nations Member States when it comes to fulfilling these obligations. This working paper presents and analyses the findings of a survey circulated to members of the OECD’s Development Assistance Committee (DAC) between July and September 2018. The survey investigated trends in official development assistance (ODA) and plans for future funding to programmes and projects that support refugees and their host communities, as well as other, non-funding efforts and responses that DAC members are making in support of refugees. The findings of this paper will establish a baseline for monitoring progress toward “funding and effective and efficient use of resources” as one of the key tools for meeting the commitments of the GCR. The paper examines some of the strengths and challenges of current donor practices, and recommends a set of priorities to guide future donor support and engagement in order to promote good donorship and to support the international community in meeting the GCR’s objectives.
    Keywords: burden- and responsibility-sharing, coherence, core contributions, financing, forced displacement, fragility, Global Compact on Refugees, humanitarian, New York Declaration for Refugees and Migrants, ODA, Official Development Assistance, peace, refugees, SDGs
    JEL: F35
    Date: 2018–12–17

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