Lecture 5: Population and migration Flashcards
PRLB ch. 7
McNamara
- Rapid population growth a threat, with catastrophic consequences, unless dealt with
- Book ‘100 Countries, 2 billion people’ – 2 billion people living in developing nations in the 1960s
Population growth as one of the Millennium Development Goals (MDG)?
Focus on the demographic transition that has characterized today’s high-income nations as well as the increasingly low- and middle income nations.
Brief history of world population
- From hunter-gatherers to agricultural settlements to urbanization
- Population growth is a recent event in human history, began in about 1800
- The industrial revolution, 1800ish
- death rate fell, life expectancy increased population growth
Demographics today
- very different in high and low income countries
o high income: low fertility, high life expectancy aging populations, growth almost solely coming from immigration
o low income: high fertility rates, lower life expectancy …
Demographic future: population growth. Growing tendency to aging
How does population growth affect economic development and how does economic development affect population growth?
- Malthus
Summary
- Twentieth century: populating the planet
- Driving force behind the population increase the last 100 years: demographic transition, especially in the developing world
- Debate on the effect of population growth on economic development
- The rate of the population growth is slowing. New demographic challenge: aging
Barro and Sala-i-Martin (2004), ch. 9
Labor supply and population
- Endogenizing population and labor force participation in economic growth models.
Migration curve in the solow model.
Migration is compared to capital mobility, with labor moving from low-wage to high-wage areas, affecting population and economic growth in destination and source countries.
Solow model
- Migration introduced in model
- Allows for mobility of persons but not capital
- The model shows how migration influences growth through capital and population changes
- Assumption: migrants bring human capital, but little physical capital
- Positive relationship between domestic wages and migration rates
- The steady state is determined by the intersection of saving and depreciation curves, incorporating migration’s impact on capital per effective worker
- Empirical data is used to estimate migration’s impact on convergence, showing small increases in convergence speed due to migration, which is consistent across regions and countries
- The relationship between migrants’ human capital and economic convergence : higher human capital in migrants can influence growth dynamics differently in source and destination economies
See notes for equations and grafs.
Clemens (2011 and 2022)
(2011):
Effects of emigration in origin country (so people leaving)
‘How large are the economic losses caused by barriers to emigration?’
- Barriers: limited information, credit constraints, policy barriers
The paper explores the economic impact of restrictive emigration policies, arguing that these constraints create significant global economic losses. Clemens highlights that while migration economics typically focuses on the effects of immigration on receiving countries, the effects of emigration on sending countries are less studied but equally important.
Key Points
1. Emigration Constraints:
* A large number of individuals in low-income countries wish to emigrate but face significant barriers, including policy restrictions in destination countries.
* The demand for migration opportunities is high, as evidenced by the large number of applicants for the U.S. Diversity Visa Lottery.
2. Economic Losses from Emigration Barriers:
* Estimates suggest that the economic gains from reducing migration barriers could be enormous, potentially increasing global GDP by 50-150%.
* These gains far exceed the potential gains from eliminating barriers to trade and capital flows.
3. Gains from Migration:
* Even partial reductions in emigration barriers could result in substantial global economic gains, greater than the total elimination of trade and capital flow barriers.
* The economic benefits stem from increased productivity of migrants and the positive effects on their home countries through remittances and other channels.
4. Assumptions and Sensitivity:
* The paper discusses several critical assumptions underlying these estimates, such as the impact of migrants on non-migrants, the shape of labor demand, the effect of location on productivity, and the feasibility of large-scale migration flows.
* Sensitivity to these assumptions indicates the need for more detailed research.
5. Global Welfare Gains:
* Clemens uses theoretical models to show that removing emigration barriers would result in significant welfare gains.
* The analysis suggests that the productivity of migrants at their destination is a key factor influencing the magnitude of these gains.
6. Policy Implications:
* The study advocates for a research agenda focused on understanding the true economic impact of emigration barriers.
* Clemens calls for policymakers to consider the potential global economic benefits of more open migration policies.
7. Externalities and Elasticity of Labor Demand:
* The paper examines the externalities of emigration, such as the effects on non-migrants’ productivity and the potential for brain drain.
* It also discusses how changes in labor demand elasticity in both origin and destination countries could influence the overall economic impact of migration.
Conclusion
Clemens argues that restrictive emigration policies represent a significant distortion in the global economy, resulting in substantial economic losses. By easing these barriers, the world could achieve considerable gains in productivity and welfare. The paper suggests a need for a deeper understanding of the economic effects of emigration and calls for more research to inform better policy decisions.
(2022):
- Global migration
- Global labor mobility
Clemens (2022) examines the dramatic increase in global migration since the 1980s, challenging traditional economic models of migration. It highlights that:
1. Old Model of Location Choice: Traditional models predicted that migration would decrease with economic development and rising trade, but these have been proven false.
2. Causes of Rising Mobility: Migration has surged due to economic development in origin countries, not poverty. Trade and investment have also fueled migration.
3. Effects of Mobility: Increased migration has not harmed native workers’ wages or employment in destination countries but has instead stimulated economic activity and innovation. Migrants are often positively self-selected, contradicting the assumption that they are the least productive.
4. New Paradigm: The paper calls for a new economic model of migration, likening it to investment in education, which sees migration as a complement to trade, investment, and development, rather than a substitute.
In essence, the resurgence of global migration is attributed to economic development and globalization, rather than the failure of origin countries, and has had mostly positive economic effects.
