Table of contents(38 chapters)
For some time we have been concerned with the use of the concept of culture in the economics migration literature and in our own work. Migrants, the places they leave and the places they go, are complex elements that are linked in multiple and multidimensional ways. Yet in our search for simple models, we often summarize this information in single categorical variables such as country of origin, just as in the discrimination literature we often summarize the differences in gender or ethnic/racial achievements solely by a shift in the intercept. Occam's razor is sometimes too sharp.
Culture is not new to the study of migration. It has lurked beneath the surface for some time, occasionally protruding openly into the discussion, usually under some pseudonym. The authors bring culture into the open. They are concerned with how culture manifests itself in the migration process for three groups of actors: the migrants, those remaining in the sending areas, and people already living in the recipient locations. The topics vary widely. What unites the authors is an understanding that though actors behave differently, within a group there are economically important shared beliefs (customs, values, attitudes, etc.), which we commonly refer to as culture. Culture and identity play a central role in our understanding of migration as an economic phenomenon; but what about them matters? Properly, we should be looking at the determinants of identity and the determinants of culture (prices and incomes, broadly defined). But this is not what is done. Usually identity and culture appear in economics articles as a black box. Here we try to begin to break open the black box.
We introduce the idea that informational cascades can explain the observed regularity that emigrants from the same location tend to choose the same foreign location. Thus, informational cascades generate herd behavior. Herd behavior is compared with the network-externalities explanation of the same phenomenon of migration clustering.
Income polarization is a relatively new concept introduced in the literature of the measurement of income inequality. It has essential properties that may be used to measure relative deprivation and it adds another dimension to the measurement of income inequality concerned mainly with the middle income class (Esteban and Ray, 1994). No study, however, seems to have tried to decompose by population subgroups any of the polarization indices that have appeared in the literature. This study introduces a methodology that decomposes the polarization index recently suggested by Deutsch et al. (2007) by population subgroups. This polarization index is related to the Gini index and its components so that previous results on the decomposition of the Gini index may be applied. Two main cases are examined, that of nonoverlapping groups and overlapping groups. The paper also includes an empirical analysis based on Israeli data for the period 1990–2004, which covers the case of nonoverlapping (income) groups as well as that of overlapping groups, the latter being either Jews of Western and Eastern origin or Jews and Non-Jews. The empirical analysis shows a decrease in polarization over the period 1990–2002 and an increase in polarization during the years 2002–2004. Using the Shapley methodology we analyze the contribution of the different factors to the trend in polarization observed over time.
The payoff to schooling among the foreign born in the United States is only around one-half of the payoff for the native born. This paper examines whether this differential is related to the quality of the schooling immigrants acquired abroad. The paper uses the overeducation/required education/undereducation specification of the earnings equation to explore the transmission mechanism for the origin-country school-quality effects. It also assesses the empirical merits of two alternative measures of the quality of schooling undertaken abroad. The results suggest that a higher quality of schooling acquired abroad is associated with a higher payoff to schooling among immigrants in the US labor market. This higher payoff is associated with a higher payoff to correctly matched schooling in the United States, and a greater (in absolute value) penalty associated with years of undereducation. A set of predictions is presented to assess the relative importance of these channels, and the undereducation channel is shown to be the more influential factor. This channel is linked to greater positive selection in migration among those from countries with better quality schools. In other words, it is the impact of origin-country school quality on the immigrant selection process, rather than the quality of immigrants' schooling per se, that is the major driver of the lower payoff to schooling among immigrants in the United States.
Policy-makers in OECD countries appear to be increasingly concerned about growing migration pressure from developing countries. At the same, at least within Europe, they typically complain about the low level of internal labor mobility. In this chapter, we try to cast some light on the issues of both internal and external labor mobility. We investigate the link between development and migration and argue, on both theoretical and empirical grounds, that it is likely be nonlinear. More precisely, we find that, in a relatively poor sending country, an increase in income will have a positive impact on the propensity to migrate, even if we control for the income differential with the receiving country, because the financial constraint of the poorest become less binding. Conversely, if the home country is relatively better off, an increase in income may be associated with a fall in the propensity to migrate even for an unchanged income differential. Econometric estimation for Southern Europe over the period 1962–1988 provides substantial support to this approach. We estimate first the level of income for which the financial constraint is no more binding, around $950, and then the level of income for which the propensity to migrate declines, which is around $4,300 in 1985 prices. We therefore predict a steady decline in the propensity to migrate from Southern European countries. Similarly, our results highlight the possibility that the pressure to migrate from Northern African countries and other developing countries may increase with further growth.
We study the correlates of immigrant location and migration choices to address the following questions: What location-specific, economic, and demographic factors are associated with these choices? Does the influence of these factors differ by immigrant characteristics? What are the factors associated with the observed increase in immigrant geographic dispersion during the 1990s? Our analysis suggests that: (1) There is significant heterogeneity in the correlates of immigrant location and migration choices; associations vary by immigrant birthplace, age, gender, education, and duration of residence in the United States. (2) Economic factors are, for the most part, weakly associated with immigrant location decisions. (3) Immigrants appear to be more attracted to states with large (growing) populations; less attracted to states with a high proportion of other foreign-born persons; more attracted to states with high unionization, and less attracted to states with high crime. (4) The association between location-specific characteristics and immigrant location choices changed between 1990 and 2000 for some immigrant groups and this explains most of the increase in geographic dispersion during the 1990s. In contrast, changes in location attributes and changes in immigrant composition explain relatively little of the increase in dispersion.
Empirical evidence on the labor market performance of immigrants shows that migrant workers suffer from an initial disadvantage compared to observationally equivalent native workers, but that their wages subsequently tend to increase faster than native earnings. Economists usually explain these phenomena by spot markets for labor and investments into human capital. By contrast, this chapter proposes a contractual model. This alternative has important implications for integration policy, because it suggests investing into the transparency of foreign educational credentials. Also contrasting human capital theory, the model suggests that permanent migrants never earn higher wages than equally skilled temporary migrants.
In this chapter, we consider the interaction between local workers and migrants in the production process of a firm. Both local workers and migrants can invest effort in assimilation activities to increase the assimilation of the migrants into the firm and so increase their interaction and production activities. We consider the effect the relative size (in the firm) of each group and the cost of activities has on the assimilation process of the migrants.
Are ethnic specialization and thus a downward sloping labor demand curve fundamental features of labor market competition between ethnic groups? In a general equilibrium model, this chapter argues that spillover effects in skill acquisition and social distances between ethnic groups engender equilibrium regimes of skill acquisition that differ in their implications for ethnic specialization. Specifically, fundamental relationships through which relative group sizes determine whether ethnic specialization arises and in what degree are established. Thus, this chapter theoretically justifies a downward sloping labor demand curve and explains why some ethnic groups earn more than others, ethnic minorities underperforming or outperforming majorities.
When immigrants experience “nationality discrimination” in the labor market, ceteris paribus their earnings are lower than native-born workers because they were born abroad. The challenge to testing for nationality discrimination is that the native/immigrant earnings gap will very likely also be influenced by productivity differences driven by incomplete assimilation of immigrants, as well as the possibility of racial or gender discrimination. There is relatively little empirical literature, and virtually no theoretical literature, on this type of discrimination. In this study, a model of nationality discrimination where customer prejudice and native/immigrant productivity differences jointly influence the earnings gap is presented. We derive an extension of Becker's market discrimination coefficient (MDC), applied to the case of nationality discrimination when there are productivity differences. A number of novel implications are obtained. We find, for example, that the MDC depends upon relative immigrant productivity and relative immigrant labor supply. We test the model on data for hitters and pitchers in Major League Baseball, an industry with a history of immigration, potential for customer discrimination, and clean detailed microdata on worker productivities and race. Ordinary least squares (OLS) and decomposition methods are used to estimate the extent of discrimination. We find no compelling evidence of discrimination in the hitter group, but evidence of ceteris paribus underpayment of immigrant pitchers. While our test case is for a particular industry, our theoretical model, empirical specifications, and general research design are quite generalizable to many other labor markets.
Cross-sectional studies have shown that immigrants' earnings tend to rise faster than those of comparable natives. One reason for this is the immigrant's acquisition of proficiency in the host country's native language. Immigrants can improve their knowledge of the host country language either by interacting with native speakers or by taking a formal language course. Focusing on Jewish immigrants in Israel from the Former Soviet Union (FSU), the present chapter examines an immigrant's decision to invest in learning Hebrew by participating in a formal government-sponsored course. The chapter estimates immigrants' lifetime earnings in order to identify those immigrants with the highest potential benefit from taking a Hebrew course and to determine whether they are more likely to attend one. The chapter finds that immigrants respond to pecuniary incentives to acquire the language of the host country and that this is particularly true for immigrants with 13+ years of schooling.
Past studies of the empirical relationship between immigration and crime during the first major wave of immigration have focused on violent crime in cities and have relied on data with serious limitations regarding nativity information. We analyze administrative data from Pennsylvania prisons, with high-quality information on nativity and demographic characteristics. The latter allow us to construct incarceration rates for detailed population groups using U.S. Census data. The raw gap in incarceration rates for the foreign and native born is large, in accord with the extremely high concern at the time about immigrant criminality. But adjusting for age and gender greatly narrows that observed gap. Particularly striking are the urban/rural differences. Immigrants were concentrated in large cities where reported crime rates were higher. However, within rural counties, the foreign born had much higher incarceration rates than the native born. The interaction of nativity with urban residence explains much of the observed aggregate differentials in incarceration rates. Finally, we find that the foreign born, especially the Irish, consistently have higher incarceration rates for violent crimes, but from 1850 to 1860 the natives largely closed the gap with the foreign born for property offenses.
Within immigrant society, different groups wish to help the migrants in different ways – immigrant societies are multilayered and multidimensional. We examine the situation where there exists a foundation that has resources and that wishes to help the migrants. To do so, they need migrant groups to invest effort in helping their country folk. Migrant groups compete against one another by helping their country folk and to win grants from the foundation. We develop a model that considers how such a competition affects the resources invested by the groups' supporters and how beneficial it is to immigrants. We consider two alternative rewards systems for supporters – absolute and relative ranking – in achieving their goals.
We examine the effect of borrowing constraint facing new immigrants on the process of their assimilation in the new society. We shall do so in a two-period model. In period 1, immigrants invest, with some costs to them, in trying to assimilate. The probability of success in this endeavor depends on the amount invested and also on the level of the provision of a “public” good paid for by lump-sum taxation of “natives”. Those who succeed enjoy a higher level of productivity and therefore wages in period 2. The level of investment is endogenously determined. Assimilation also affects remittances by immigrants. Given this framework, we examine the effect of public support on the degree of assimilation and income repatriation. We do so under two scenarios regarding the credit market facing new immigrants. In the first, they can borrow as much as they want in period 1 at an exogenously given interest rate. In the second scenarios, there is a binding borrowing constraint. We compare the equilibrium under the two scenarios.
This chapter examines the role of immigrant networks on trade, particulalry through the demand effect. First, we examine the effect of immigration on trade when the immigrants consume more of the good that is abundant in their home country than the natives in a standard Heckscher–Ohlin model and find that the effect of immigration on trade is a priori indeterminate. Our econometric gravity model consisting of 63 major trading and immigrant-sending country for the United States over 1991–2000. We find that the immigrants income, mostly through demand effect has a significant negative effect on U.S. imports. However, if we include the effect of the immigrant income interacted with the size of the immigrant network, measured by the immigrant stock, we find that higher immigrants income lowers the immigrant network effect for both U.S. exports and imports. This we find in addition to the immigrants stock elasticity of 0.27% for U.S. exports and 0.48% for U.S. imports. Capturing the immigrant assimilation with the level of immigrant income and the size of the immigrant enclave this chapter finds that the immigrant network effect on trade flows is weakened by the increasing level of immigrant assimilation.
This chapter investigates whether and to what extent immigrants in Germany are integrated into German society by utilizing a variety of qualitative information and subjective data collected in the 1999 wave of the German Socio-Economic Panel (GSOEP). To this end, leisure-time activities and attitudes of native Germans, ethnic Germans and foreign immigrants of different generations are compared. The empirical results suggest that conditional on observable characteristics the activities and attitudes of foreign immigrants from both generations differ much more from those of native Germans than the activities/attitudes of ethnic Germans. Furthermore, the attitudes of second-generation immigrants tend to be characterized by a larger degree of fatalism, pessimism and self-doubt than those of all other groups, although their activities and participation in societal life resemble more those of native Germans than those of their parents generation.
This chapter examines the differential effects of mother's schooling and father's schooling on the acquisition of schooling by their offspring. It does this in a “cross-cultural” context by comparing results across three countries: Germany, Hungary, and the Former Soviet Union. It looks within these countries, by gender, at different ethnic subgroups. Evidence is found, generally, that father's schooling is more important than mother's, but this does vary by ethnic group. Mother's schooling plays a relatively larger role for females.
Chapter 18 Intergenerational Transfer of Human Capital under Post-War Distress: The Displaced and the Roma in the Former Yugoslavia
In this chapter, we investigate the effects of vulnerability on income and employment in Bosnia and Herzegovina, Croatia, Montenegro, and Serbia using a unique 2004 UNDP dataset. Treating the collapse of the former Yugoslavia as a natural experiment, we compare three groups that have been differently affected by the wars and post-war distress: the majority as the benchmark, the ex ante and ex post vulnerable Roma people, and the ex ante equal but ex post vulnerable refugees and internally displaced people (RIDPs). Our findings reveal significant negative effects of vulnerability on income and employment. RIDPs seem to be about as negatively affected as Roma across the four states, which indicate that vulnerability inflicted by relatively recent displacement may have similar effects as vulnerability rooted deep in the past. When we look at education as one of the key determinants of socio-economic outcomes, both groups exhibit similarly substandard educational outcomes of children and significant inertia in intergenerational transfer of human capital. Our findings highlight the need for policies that not only tackle vulnerability as such, but address the spillover effects of current vulnerability on future educational attainment.
The change in household structure is a worldwide phenomenon that reflects demographic changes, social and cultural trends, and changing economic conditions. The purpose of this chapter is to explore the prevalence of multigenerational households among recent immigrants from Eastern Europe to Israel. The size of the household among these immigrants is smaller, on average, than the household size among native-Israelis, even though immigrants have a higher tendency to live in extended households.
Our analysis shows that the share of multigenerational households declines with duration in Israel among young immigrants, but not so much among elder immigrants who arrived at older age. This difference may reflect the better economic integration of younger immigrants in the local labor market and the lower attachment of younger immigrants to cultural habits that existed in the origin country. In addition, there is a great similarity in the prevalence of multigenerational households between cohorts suggesting that immigrants, presumably, do not form a multigenerational household in Israel in order to provide them with a social anchor, but rather to help them overcome economic constraints upon arrival.
This chapter addresses the following questions: To what extent do the socio-economic characteristics of circular/repeat migrants differ from the migrants who return permanently to the home country after their first trip (i.e. return migrants)? And, what determines each of these distinctive temporary migration forms? Using Albanian household survey data and both a multinomial logit model and a maximum simulated likelihood (MSL) probit with two sequential selection equations, we find that education, gender, age, geographical location and the return reasons from the first migration trip significantly affect the choice of migration form. Compared to return migrants, circular migrants are more likely to be male, have primary education and originate from rural, less developed areas. Moreover, return migration seems to be determined by family reasons, a failed migration attempt but also by the fulfilment of a savings target.
Chapter 21 Labor Migration, Remittances, and Economic Well-Being: A Study of Households in Rajasthan, India
Remittances sent by immigrants have long been viewed as a means to combat poverty, to improve consumption, and to raise standard of living. The present study examines the impact of remittances on the economic well-being of Indian households. The analysis is conducted on a randomly selected representative sample of households in Rajasthan. Three types of households are examined: 575 households having current labor migrants, 162 never having migrants, and 232 not having migrants at present but sent migrants in the past. Analysis of the data reveals meaningful differences between the three types of households. Specifically, those having labor migrants are characterized by the highest household income and standard of living. Further analyses suggest that although remittances are likely to improve economic well-being and to secure a higher standard of living they do not have long lasting effect on the economic well-being of the families when migration ends.
Chapter 22 Promoting the Educational Success of Latin American Immigrant Children Separated from Parents during Migration
For many immigrants, especially those from Central America and Mexico, it is common for a mother or father (or both) to migrate to the United States and leave their children behind. Then, after the parent(s) have achieved some degree of stability in the United States, the children follow. In our previous research, we found that children separated from parents during migration are more likely to be behind others their age in school, are more likely to repeat a grade, and are more likely to drop out of high school. The negative impact of separation during migration on educational success is largest for children separated from their mothers (in contrast to fathers), for those whose parents have lived in the United States illegally, and for those who reunited with parents as teenagers (rather than at younger ages).
In this chapter, we suggest public policies to help immigrant children separated from parents during migration to succeed in U.S. schools. The policies that we discuss are based on focus group discussions with parents separated from their children during migration, interviews with psychologists and school administrators, and an online survey of elementary and high school teachers.
Chapter 23 Cultural Differences in the Remittance Behaviour of Households: Evidence from Canadian Micro Data
This chapter analyses the effect of cultural differences among ethnic groups on the remittance behaviour of native and immigrant households in Canada. In contrast to the New Economic of Labour Migration (NELM) literature that examines remittance motivation in the framework of extended family agreements, we embed remittances in a formal demand system, suggesting that they represent expenditures on social relations with relatives and/or friends and contribute to membership in social/religious organisations respectively. The results indicate strong ethnic group cultural differences in the remittance behaviour of recent Asian immigrant households and highlight the importance of differentiating with respect to cultural background when analysing the determinants of remittances.
This chapter investigates the economic performance of immigrants from the Former Soviet Union (FSU) countries in Canada. The contribution of this chapter lies in its use of the fall of the Soviet Union as a natural experiment to detect possible differential labour market performances of immigrants undergoing different screening systems and affected by different push and pull factors. In short, the collapse of the former Soviet Union allows an exogenous supply change in the number and type of FSU immigrants potentially destined to enter Canada. For this purpose, Census micro-level data from the 1986, 1991, 1996 and 2001 Canadian Population Census are utilised to estimate earnings and employment outcomes for immigrants arriving from the Soviet Union and from FSU countries before and after the collapse.
We analyze a newly available dataset of migration policy decisions reported by governments to the United Nations Department of Economic and Social Affairs between 1976 and 2007. We find evidence indicating that most governments have policies aimed at either maintaining the status quo or at lowering the level of migration. We also document variation in migration policy over time and across countries of different regions and income levels. Finally, we examine patterns in various aspects of destination countries' migration policies (policies toward family reunification, temporary vs. permanent migration, high-skilled migration). This analysis leads us to empirically investigate the determinants of destination countries' migration policies. In particular, we examine the link between public opinion toward immigrants and governments' policy decisions. While we find evidence broadly consistent with the median voter model, we conclude that this framework is not sufficient to understand governments' migration policies. We discuss evidence that suggests that interest-groups dynamics may play a very important role.
Chapter 26 Changes in Attitudes toward Immigrants in Europe: Before and After the Fall of the Berlin Wall
This chapter provides a statistical analysis of the determinants of attitudes toward foreigners displayed by Europeans sampled in Eurobarometer surveys in 1988 and 1997. Those who compete with immigrants in the labor market are more negative toward foreigners. An increased concentration of immigrants in neighborhoods increases the likelihood of negative attitudes. Racial prejudice exerts a strong influence on anti-foreigner sentiment. Greater racial prejudices, and the decline in the strength of educational attainment in reducing negative attitudes toward foreigners, contribute to the increased anti-foreigner attitudes between 1988 and 1997.
This chapter investigates the relationship between social norms and the local population's attitude toward immigration. Although there are benefits from immigration in terms of greater consumption opportunities, disutility from changes in social norms due to immigration may vary across different segments of the local population. This social disutility leads to opposition to foreigners even through anti-immigrants actions. The chapter shows how the disutility from changes in social norms will affect behavior toward immigrants and the formulation of immigration policy.
Chapter 28 Ethnic Fragmentation, Conflict, Displaced Persons and Human Trafficking: An Empirical Analysis
Ethnic conflicts and their links to international human trafficking have recently received a surge in international attention. It appears that ethnic conflicts exacerbate the internal displacement of individuals from networks of family and community, and their access to economic and social safety nets. These same individuals are then vulnerable to being trafficked by the hopes of better economic prospects elsewhere. In this chapter, we empirically examine this link between ethnic fragmentation, conflicts, internally displaced persons, refugees, and international trafficking, making use of a novel dataset of international trafficking. We conduct a direct estimation, which highlights the ultimate impact of ethnic fragmentation and conflict on international trafficking through internal and international displacements.