lecture 4 - migration

Question 1

list some facts about emmigration within the EU?

Answer 1

 Data show that the migration from the EU12 to the EU 15 accelerated after the 2004 enlargement.
 The stock of foreign EU citizens as a percentage of the working population was less than 5% in most EU15 countries in 2009.
 Although most countries in the EU experience positive net migration from the RoW, net migration rates are less than 0.8% in all EU15 countries (Luxemburg is an exception).
 In the UK, immigration has risen over time.

Question 2

what is the framework for migration with flexible wages?

Answer 2

there are two countries
there are two factors of production capital and labour
capital cannot be adjusted
labour supply is perfectly inelastic
countries have different wages to begin with: 1) heterogenous productivities 2) heterogenous country size

Question 3

in high wage country what is the welfare effects of emigration according to the framework?

Answer 3

in the high wage country, domestic workers gain whilst capitalists gain.

Question 4

in a low wage country what is the welfare effects of emigration according to the framework?

Answer 4

in a low wage country, domestic workers gain from emigration whilst capitalists lose

Question 5

what is the overall effect of migration on the country?

Answer 5

the overall effect is that both countries gain from migration overall

Question 6

what is the empircal evidence on migration on UK wages?

Answer 6

manacorda et al (2012) have empically shown that migreation has no significant effect on the wages of UK natives

Question 7

how can governments adress the uneven effects of migreation?

Answer 7

they can use side payments for the uneven effects of migration. if migrants to the high wage country are fiscal residents there, they will pay their taxes to the local government

Question 8

what does the heckscher ohlin theory of international trade say about migration?

Answer 8

countries specialise in the sector that is intensive in the abundant factor (partial specialisation). the skill abundant country specialises in the skilled intensive sector whilst the unskilled abundant specialises in the unskilled intensive sector. the impact this has on the countries labour market is that the demand for skilled (unskilled) workers in the skilled-abundent country increases(decreases) and the opposite is true for the unskilled abundant country

Question 9

what is the empiracle relationship between trade openness and unemployment in the long run?

Answer 9

there is a negative relationship between trade openness and unemployment in the long run

Question 10

are migration rates in the EU too small or too big?

Answer 10

if the labour markets are sufficiently open , then wage differentials should be neutralised

Question 11

what are the barriers to intra EU labour mobility?

Answer 11

lack of pension transferability
cross country information about job vacancies remain scarce
recognition of professional qualifications is problematic
public sector jobs are mostly closed to non nationals
housing market policies

Question 12

what are the main summary points for the migration theory?

Answer 12

migration implies a net increase in welfare for all the countries involved, although governments would need to compensate workers (capitalists) in high(low) wage countries
wage differential in the EU are big as the costs of migrating are high due to institutional differences across countries
there is no evidence of a negative impact of migration on wages in the UK

Question 13

what are the main summary points of the evidence about migration?

Answer 13

 Empirical evidence suggests that international trade is associated with lower overall unemployment in countries.
 There is little evidence on the impact of migration on unemployment.