nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2023‒05‒15
thirteen papers chosen by
Yuji Tamura
La Trobe University

  1. The Determinants of Refugees' Destinations: Where Do Refugees Locate within the EU? By Di Iasio, Valentina; Wahba, Jackline
  2. Immigration Disruptions and the Wages of Unskilled Labor in the 1920s By Jeff Biddle; Elior Cohen
  3. Field and Natural Experiments in Migration By David McKenzie; Dean Yang
  4. Distributional effects of immigration and imperfect labour markets By Julian Costas-Fernandez; Simon Lodato
  5. Decomposing Migrant Self-Selection: Education, Occupation, and Unobserved Abilities By Ilpo Kauppinen; Panu Poutvaara
  6. Uncertainty, Citizenship & Migrant Saving Choices By Hannah Zillessen
  8. Income Taxes and the Mobility of the Rich: Evidence from US and UK Households in Switzerland By Marko Köthenbürger; Costanza Naguib; Christian Stettler; Michael Stimmelmayr
  9. Academic Migration and Academic Networks: Evidence from Scholarly Big Data and the Iron Curtain By Donia Kamel; Laura Pollacci
  10. Who Are Leaving Metropolitan Areas in the Post-COVID-19 Era:An Analysis of Urban Residents' Migration Decisions in Japan By PENG, Xue; DAI, Erbiao
  11. Bound by Ancestors: Immigration, Credit Frictions, and Global Supply Chain Formation By Jaerim Choi; Jay Hyun; Ziho Park
  12. Refugee Benefit Cuts By Christian Dustmann; Rasmus Landersø; Lars Højsgaard Andersen
  13. Price and Prejudice: Housing Rents Reveal Racial Animus By Marius Brülhart; Gian-Paolo Klinke; Andrea Marcucci; Dominic Rohner; Mathias Thoenig

  1. By: Di Iasio, Valentina (University of Southampton); Wahba, Jackline (University of Southampton)
    Abstract: The recent so called Mediterranean refugee crisis has ignited concerns about the magnitude of the flows of asylum seekers to Europe. This paper examines the determinants of the destination choice of first time non-EU asylum applicants to the EU, between 2008-2020. It investigates the role played by policies related to employment rights, processing of asylum applications, attractiveness of the welfare system, economic factors and networks on the destination of asylum seekers within the EU. We find that the strongest pull factor for asylum seekers to a destination is social networks both in terms of previous asylum applicants as well as stock of previous migrants. Our findings also suggest that employment bans are not a strong deterrence for asylum seekers given their modest association to asylum flows.
    Keywords: asylum seekers, refugees, EU migration, employment ban
    JEL: F22 J61 J15 O52
    Date: 2023–04
  2. By: Jeff Biddle; Elior Cohen
    Abstract: An era of mass immigration into the United States ended with the onset of World War I in Europe, followed by the passage of restrictive immigration laws in 1921 and 1924. We analyze various sources of wage data collected in the 1910-1929 period to explore the impact of this significant disruption of the flow of immigration on the wages of unskilled labor. Our approach to identification entails examining differences in wages across local labor markets and industries differentially exposed to the disruptions in immigration due to different ethnic compositions of their immigrant populations in the pre-war era. We find evidence strongly suggesting that during the 1920s, industries and regions more affected by the disruptions in immigration experienced larger reductions in flows of immigrants that resulted in increased wages of unskilled labor.
    Keywords: immigration; wages; labor force
    JEL: J3 J61 N31 N32
    Date: 2022–09–27
  3. By: David McKenzie (Development Economics Research Group, World Bank); Dean Yang (Department of Economics, University of Michigan)
    Abstract: Many research and policy questions surrounding migration are causal questions. We want to know what causes people to migrate, and what the consequences of migration are for the migrants, their families, and their communities. However, answering these questions requires dealing with the self-selection inherent in migration choices. Field and natural experiments offer methodological approaches that enable answering these causal questions. We discuss the key conceptual and logistical issues that face applied researchers when applying these methods to the study of migration, as well as providing guidance for practitioners and policymakers in assessing the credibility of causal claims. For randomized experiments, this includes providing a framework for thinking through what can be randomized; discussing key measurement and design issues that arise from issues such as migration being a rare event, and in measuring welfare changes when people change locations; as well as discussing ethical issues that can arise. We then outline what makes for a good natural experiment in the context of migration and discuss the implications of recent econometric work for the use of difference-in-differences, instrumental variables (and especially shift-share instruments), and regression discontinuity methods in migration research. A key lesson from this recent work is that it is not meaningful to talk about “the†impact of migration, but rather impacts are likely to be heterogeneous, affecting both the validity and interpretation of causal estimates.
    Keywords: Experimental Methods, Difference-in-Differences, Instrumental Variables, Regression Discontinuity, Natural Experiment, Migration
    JEL: F22 J61 O15 C93 C23 C26
    Date: 2022–11
  4. By: Julian Costas-Fernandez (University College London); Simon Lodato (Middlesex University London)
    Abstract: We present evidence whereby immigration increases labour productivity while reducing the labour share, thus redistributing income from workers to employers. This result is unlikely in competitive markets with skill-neutral capital, where labour share is orthogonal to immigration shocks in the long run. Instead, our empirical evidence better matches predictions from imperfect labour market models where immigrant and native workers are heterogeneous in both skills and labour supply elasticities.
    Keywords: Immigration, Productivity, Labour Share, Imperfect Labour Markets, FactorIncome Distribution
    JEL: D33 J21 J24 J42 J61 O47
    Date: 2023–01
  5. By: Ilpo Kauppinen; Panu Poutvaara
    Abstract: We analyze self-selection and sorting of emigrants from Finland, using full-population administrative data from Statistics Finland. We analyze emigration events lasting at least five years and decompose migrant self-selection into education, occupation, and unobserved abilities. Our analysis focuses on Finnish citizens satisfying three criteria: they were between 25-54 years of age; they had no immigrant background; and they were employed. We find that emigrants from Finland are strongly positively self-selected in terms of education and earnings. We also find strong evidence of sorting: men who emigrate outside Nordic countries are considerably better educated and have higher earnings and residual earning than men who emigrate to Nordic countries. Most of the self-selection in terms of higher earnings can be explained by emigrants being more educated. Adding occupational controls increases the fraction of explained self-selection only marginally. While men are positively self-selected also with respect to residual earnings, women are not.
    Keywords: international migration, self-selection, Roy model, education, residual earnings
    JEL: F22 I26 J31
    Date: 2023
  6. By: Hannah Zillessen
    Abstract: In most Western countries, migrants hold significantly less wealth than natives. Migrants also face significantly more uncertainty about their future. This paper examines the central role of uncertainty over citizenship prospects and future location in explaining their saving choices. Exploiting quasi-experimental variation and panel data from Germany, I show that migrants with a right to citizenship save as much as comparable natives, while migrants without this right save 30% less. This unexplained gap is closed completely when migrants in the latter group gain access to citizenship. The effect is not driven by changes in resources, but rather willingness to save. While standard theory predicts that saving increases in uncertainty, I show that the effect can reverse if utility is state-dependent, malleable, or resources are not equally accessible across states. I build a life-cycle saving model with uncertain retirement location and heterogeneous country preferences. The model shows that agents can have a “preparatory saving motive” that decreases in uncertainty. I confirm the importance of this novel motive empirically, showing that migrants become significantly more likely to invest in illiquid assets if they gain certainty about their right to stay.
    Date: 2022–11–10
  7. By: Giulia Bettin (Marche Polytechnic University and MoFiR); Amadou Jallow (University of the Gambia); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR)
    Abstract: The literature on the impact of natural disasters on remittances has provided mixed evidence so far, with identification remaining a key challenge. This paper studies the insurance role of remittances by investigating their dynamic response in the aftermath of a disaster. We use a novel and rich panel dataset of monthly remittance flows from Italy to 81 developing countries for the period 2005 to 2015. We find that monthly remittance flows on average increase by 2% due to natural disasters in migrants' home countries. The response gets significant a few months after the event and tends to disappear within a year from the disaster occurrence. The intensity and timing of remittances' responsiveness are heterogeneous according to the nature of the disaster, the receiving country's characteristics, and migrants' socio-economic conditions in the host country.
    Keywords: migrants' remittances, international migration, natural disasters
    JEL: F24 F22 Q54
    Date: 2023–04
  8. By: Marko Köthenbürger; Costanza Naguib; Christian Stettler; Michael Stimmelmayr
    Abstract: We provide quasi-experimental evidence on the income tax-induced migration of foreign high-income households living in Switzerland by exploiting the differential tax treatment of UK and US households. While the two groups are similar in terms of non-tax sorting preferences, US households are effectively insulated from Swiss income taxation due to the US world-wide income tax system. Comparing the location choices of UK households (our treatment group) with those of US households (our control group) within a one-hour commuting zone of Zurich, we find a migration elasticity with respect to the net-of-tax rate of around eight. This estimate mirrors the possibility of unrestricted migration between small Swiss municipalities with significantly different income tax rates.
    Keywords: high-income households, location choice, income taxes, sorting
    JEL: H24 H71 J44 R32
    Date: 2023
  9. By: Donia Kamel; Laura Pollacci
    Abstract: Iron Curtain and Big Data are two words usually used to denote completely two different eras. Yet, the context the former offers and the rich data source the latter provides, enable the causal identification of the effect of networks on migration. Academics in countries behind the Iron Curtain were strongly isolated from the rest of the world. This context poses the question of the importance of academic networks for migration post the fall of the Berlin Wall and Iron Curtain. Using Microsoft Academic Knowledge Graph, a scholarly big data source, mapping of academics’ networks is possible and information about the size and quality of their co-authorships, by location is achieved. Focusing on academics from Eastern Europe (henceforth EE) from 1980-1988 and their academic networks (1980-1988), We investigate the effect of academic network characteristics, by location, on the probability to migrate post the fall of the Berlin Wall in 1989 and up to 2003, marking the year many EE countries held referendums or signed treaties to join the EU. The unique context ensures that there was no anticipation of the fall of the Eastern Bloc and together with the data that offers unique rich information, identification is achieved. Approximately 30k academics from EE were identified, from which 3% were migrants. The results could be explained by two channels, the cost and signalling channel. The cost channel is how the network characteristic reduces or increases the cost of migration and thus acting as a facilitator or a de-facilitator of migration. The signal channel on the other hand in which the network characteristic serves as a signal for the academic himself and his quality and his potential contribution and addition to the new host institution, thus also serving as a facilitator or a de-facilitator of migration. We find that mostly network size and quality results could be explained by the cost channel and signalling channel, respectively. Size of the network tends to be more important than the quality, which is a context-specific result. We find heterogeneous effects by fields of study that align with previous lines of research. Heterogeneous effects are explained by two things: threat of attention and arrest from KGB and the role of reputation, language, and network barriers.
    Keywords: networks, migration, academic networks, Big Data, brain drain, Iron Curtain, Eastern Europe
    JEL: C55 D85 F50 I20 I23 J24 N34 N44 O15
    Date: 2023
  10. By: PENG, Xue; DAI, Erbiao
    Abstract: Japan's central and local governments have implemented various measures to encourage internal migration from metropolitan areas to local areas to address issues related to population decrease and unbalanced regional development. However, despite a significant decrease in net migration flow from Japan's local areas to main metropolitan areas over the past 50 years, the net outflow from metropolitan to local areas has remained negative. This suggests that Japan's population migration spatial pattern is more difficult to change than that of developed countries in Europe and America. On the other hand, the three-year-long COVID-19 pandemic has brought significant changes to people's work, consumption, learning, and daily life. Will such changes affect Japanese residents' residential location choices and migration patterns? This paper uses data from "The Fifth Survey on Residents' Life Consciousness and Behavior Changes under the Influence of COVID-19" and a multinomial logit model to conduct empirical analysis. Our findings suggest that individuals who are more likely to leave metropolitan areas are those with relatively low job opportunity costs in metropolitan areas and high employment probabilities in local areas, young adults who have entered the labor market within the past ten years, individuals who have been retired for a few years, and those who prioritize their well-being. In contrast, household-related factors such as marital status, having underage children, and the work status of residents' spouse did not significantly affect their decision to move. These results provide new evidence to support major migration theories. Based on our analysis, policy recommendations are also discussed.
    Keywords: leaving metropolitan areas, migration decision, Japan, the post-Covid-19 era, leaving metropolitan areas, migration decision, Japan, the post-Covid-19 era, M13
    Date: 2023–03
  11. By: Jaerim Choi; Jay Hyun; Ziho Park
    Abstract: This paper shows that the ancestry composition shaped by century-long immigration to the US can explain the current structure of global supply chain networks. Using an instrumental variable strategy, combined with a novel dataset that links firm-to-firm global supply chain information with a US establishment database and historical migration data, we find that the co-ethnic networks formed by immigration have a positive causal impact on global supply chain relationships between foreign countries and US counties. Such a positive impact not only exists in conventional supplier-customer relationships but also extends to strategic partnerships and trade in services. Examining the causal mechanisms, we find that the positive impact is stronger for counties in which more credit-constrained firms are located and that such a stronger effect becomes even more pronounced for foreign firms located in countries with weak contract enforcement. Collectively, the results suggest that co-ethnic networks serve as social collateral to overcome credit constraints and facilitate global supply chain formation.
    JEL: F14 F22 F36 F60 G30 J61 L14
    Date: 2023–04
  12. By: Christian Dustmann (University College London); Rasmus Landersø (Rockwool Foundation); Lars Højsgaard Andersen (Rockwool Foundation)
    Abstract: This paper analyzes the effects of Denmark’s Start Aid welfare reform that targets refugees. Implemented in 2002, it enables us to study not only the reform’s immediate effects, but also its longer-term consequences, and its repeal a decade later. The reform-induced large transfer cuts led to an increase in employment rates, but only in the short run. Overall, the reform increased poverty rates and led to a rise in subsistence crime. Moreover, local demand conditions generate substantial heterogeneity in the reform’s effects on immediate and longer-term employment.
    Keywords: Social assistance, welfare state, labor market outcomes, labor demand, migration.
    JEL: E64 I30 J60
    Date: 2023–04
  13. By: Marius Brülhart; Gian-Paolo Klinke; Andrea Marcucci; Dominic Rohner; Mathias Thoenig
    Abstract: We study market rents in the neighborhood of asylum seeker hosting centers. Our empirical setting exploits the quasi-random opening of centers and spatial allocation of asylum seekers in Switzerland. Rents within 0.7km of an active center are found on average to be 3.8% lower than rents in the control group. The price drop is more pronounced when centers host a higher share of asylum seekers from Sub-Saharan countries. In contrast, neither the religious affiliation of asylum seekers nor their inferred crime propensity affect prices significantly. Our findings are consistent with racial animus as the dominant driver of observed market outcomes.
    Keywords: ethnic prejudice, willingness to pay, housing prices, refugee centers
    JEL: D90 J15 R31
    Date: 2023

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