Population and migration Flashcards
Please describe the 4 stages of the demographic transition.
First stage: Both high birth and death rates.
Second stage: Death rates declining faster than birth rates, due to the increase income lead to better nutrition and healthcare.
Third stage: Birth rates declining faster than death rates.
- Few children instead of many. No positive effect of having many children. The society wants higher educated labour, why parents spend their money on fewer children.
- The society recognizes women. They use more time working outside the household then before.
Fourth stage: Zero population growth (again)
TODAY: Almost all population growth in high-income countries
is attributable to immigration.
See graph in review population
Please outline and describe the 3 scenarios for how total fertility rates can stay above replacement rates.
Replacement rate is defined as the amount of children a couple of parents need to have to replace themselve. This is 2.1 children.
(1) Desire for large families
Back in the days, and some places still, there was a need for having a lot of children, which created the high fertility.
Later we saw the fertility transition - Øko His
(2) Unwanted children hypothesis
Having unwanted children due to lack of protection, can lead to higher fertility.
(3) Population momentum
In data we see a growing population on average in the world.
Please describe likely causes of the mortality and fertility transitions, respectively
and discuss the sequencing of the transitions.
Mortality transition is caused by:
- Nutritional improvements - Improvements in sanitation - Technology (especially, Germ theory early on; later instances also the international epidemiological transition associated with penicillin) The relative importance of each of these elements is in debate: McKeown and Fogel (nutrition) vs Preston (tech).
Fertility transition is caused by:
Range of theories exist.
Income and substitution effects. - Assume children associated with time cost. At low levels of income the income effect dominates; at high levels of income the substitution effect dominates. Mortality. - Precautionary motive for having kids (limiting the risk of being childless). Declining mortality reduces desired family size. Countervailing: Cost of non-surviving kids. Quantity/Quality. - Accelerating technological change increases the return to skill investments. Provides an incentive to reduce family size yet expand investments in each child (substituting “quantity” for “quality”). Øko His: We have went from having a lot of children, because of poverty, lack of nutritions and healthcare to having less children with higher quality (more time) put in them relative. In here a discussion between the pesimists, who argue a higher population is bad for growth, where optimists argue the opposite.
Also a discussion in demographers who emphazises the mortality explenation because it’s easier to get data. Demographers usually favor mortality explanations, as the mortality transition precedes the fertility transition.
- Imagine that the speed of technological change accelerates. Implications (in theory):
- (i) Increases income per capita, therefore improves nutrition and lowers mortality.
- (ii) Makes more investments per child (e.g., schooling) more attractive and thus lowers fertility if Q-Q trade-off is operative.
- BUT: Its very likely that (i) simply sets in faster than (ii).
In theory, the relative timing of the two transitions tells us little (if anything) about the mechanisms.
Outline the basic ideas of population pessimists versus population optimists.
Pesimists (negative impact on growth):
Key reasons why population growth may lower prosperity: - Limits physical capital per capita (capital dilution) and thus labor productivity - Limits natural resources per capita (fixed factor) and thus labor productivity (extended Solow model). Optimists (positive impact on groeth): Reasons why a bigger population (or population growth) may be good forgrowth: 1. Division of labor (Adam Smith) 2. Technology adoption in the presence of population pressure (Ester Boserup) 3. More people, more ideas / non-rivalry of ideas (Phelps-Jones)
Accordingly, it is an empirical matter which theories seem to dominate.
Outline the likely estimation biases faced when analyzing the relationship between
population growth and income.
- This paper focus on negative link between n and yMankiw-Romer-Weil (1992) demonstrate a negative link (correlation)
between n and y?Problems:
- n = f – d (f=fertility, d= death). Slower n could be caused by higher d as
well as lower f.
- Fertility influenced by income (simultaneity bias)
- Being poor can also lead to population growth (Q-Q theory). (omitted
variable bias)
Several papers have tried to disentangle exactly these endogeneity problems
(advanced development economics courses look deeper into this).
Describe using a Solow model framework how migration is likely to influence
capital accumulation (including the underlying assumptions). Consider both the
case where migration is “just” influencing population growth (n) as compared to
the situation where migrants is assumed to bring productive capital.
If immigraiton only affects n, then the solow model would say that it has a negative effect on the growth rate. We have assumes that they do not bring any capital.
Compared two the case where they bring relative more capital than the average worker in the destination country, then we will still have the negative effect from higher n, but also the positive effect from the m term .
Outline (according to Clemens (2011) and Clemens (2022)) the 4 big questions related to
emigration.
1) What are the external effects of (especially skilled) emigrants’ departure on the productivity of non-emigrants?
2) What is the elasticity of labor demand, in the origin and destination countries? 3) How much of international differences in productivity depend on workers’ inherent traits—accompanying them when they move—and how much depends on their surroundings? - Is productivity mostly about who you are, or where you are? 4) Given the many barriers that prevent emigration today, what future level of emigration is feasible?
Is it true, that receiving imigrants is a cost?
Use the arguments for the Solow model:
- Yes, if we assumes they do not bring any capital.
- No, if they bring more capital then the average worker in the destination country.
The answer is a politcal view.
The paper for the readings today, say it is not a cost, if everybody has open immigration laws then it would be a benifit for the world. Reallocation mechanism worldwide with open immigration laws would increase GDP.
- Why are politicians not implimenting this? One answer could be, that politicians are focus on national politics, lacking the global view.
What are population “optimists’’ and population “pessimists”? Provide a theoretical argument
in favor of either view.
This is explained in PRLB (Chapter 7).
Population pessimists perceive population growth as
harmful to economic development. In contrast population optimists view population growth as
having the potential to increase factor productivity. The theoretical arguments for the pessimists
are (1) capital dilution; the investment needed to provide a constant amount of capital per
worker is higher with high population growth; (2) the population growth also dilutes the human
capital (less education per child) and (3) the dependency ratio is higher resulting in lower
income per capita for and lower saving at any given level of income. The Malthus arguments
with positive and negative feed-backs may also be mentioned. The main theoretical argument
for the optimists is that population growth has the potential for increasing factor productivity.
This may come about by (1) economies of scale, say in infrastructure and public service; (2)
technological change, because of larger populations having more entrepreneurs and other
creators.
Please define (i) emigration and (ii) immigration.
Emigration is the act of leaving a resident (host) country with the intent to “permanently” settle
elsewhere. Host country perspective.
Immigration is the international movement of people to a receiving (destination) country of
which they are not natives or where they do not possess citizenship. Destination country
perspective.
A migrant emigrates from their country of origin, and immigrates to their new choice of origin.
Thus, both emigration and immigration describe migration, but from different countries’
perspectives.
Using Figure 1 describe the determinants of the gains from emigration and relate the description
to the “big 4 questions” of emigration to empirical evidence.
See Figure 1 in the review population
Migrants gain welfare corresponding to area a + b.
Low-income country:
Labor gains area c.
Owners of other factors lose area b + c.
High-income country:
Labor loses area d.
Owners of other factors gain area d + e.
Total global welfare:
Gain is a + e (the shaded area).
Relationship to the four big questions:
- Emigration externalities on non-migrants, could lead to downward shifts in demand curves,
offsetting positive gains.
- If labor demand becomes highly elastic at the origin or at the destination, the gain shrinks.
- If emigrants are inherently less productive than non-migrants at the destination, the true
demand curve for their labor lies further below D*, and the gain also shrinks.
- As the size of feasible migration shrinks, L’ gets closer to L, and once again, the gain
shrinks.
Little evidence to support the notion that externalities from labor mobility would greatly affect the global welfare estimates presented above.
Estimated elasticities in various research show that the estimates used for the global welfare calculation are consistent: A 10% removal of emigration barriers leads to a 3–4 percent increase in wages for non-emigrants at the origin, and
a 2.5 percent decline at the destination. Substantial adjustment of elasticities is unlikely to alter the estimated efficiency gains.
Can better accounting for unobserved differences in the determinants of productivity between migrants and non-migrants greatly alter the estimates of efficiency gains from greater labor mobility?
Clemens: NO. Substantial expansion of emigration “politically impractical”. But: Global efficiency gains from even small relaxations of existing barriers to emigration are large.
Example:
A immigrant biochemical worker going into Novo, would their productivity be less than a danish biochemical worker on the longer run. The paper argues, NO.
We observe large variation in fertility rates across regions and countries. Provide different explanations
on why population growth may reduce welfare?
The most basic reason why population growth may reduce prosperity is Capital Dilution (population
pessimists). The good answer could illustrate a Solow model setup
… math see review
show that key reasons why
population growth may lower prosperity is that it limits physical capital per capita (capital dilution) and
thus labor productivity and limits natural resources per capita (fixed factor) and thus labor productivity
(extended Solow model).
How can international migration affect the relationship between population growth and per capita
income? Shitty question formulation
The good answer will take point of departure in the migration curve and a Solow growth diagram to
illustrate the impact of migration.
See graph in review
The migration rate. For given conditions in other economies, a higher value of k raises the domestic wage rate and tends accordingly to increase the net migration rate, m. (The interaction between the migration curve and the horizontal curve is the quantity of capital per effective worker that yields a zero net
migration rate). A reduction of wage rates in foreign countries makes migration to the domestic country
more attractive and shifts the function m(k) upward. The slope of the function depends on the relation
between the cost of moving (for the marginal migrant) and the volume of migration. If this cost increases
rapidly with the number of migrants, then a change in k has only a small effect on migration; that is, the
curve m(k) is relatively flat.
See graph in review
What if conditions worsen in other economies and there is an immigration pressure?
Then m(k) would shift upwards (and so will the curve effective depreciation. k* falls and m* rises. An
expansion of the supply of immigrants lowers the steady state capital intensity in the domestic economy.
This result follows because the immigrants come with relatively little capital. Note: Transitional dynamics
and convergence will depend on the sensitivity of migration to k.
Evidence: Increase in convergence
speed across countries due to migration. However, differences between sending and receiving countries.
Explain possible endogeneity problems faced when studying the relationship between international
migration and poverty?
Endogeneity issues: International migration and remittances may reduce poverty, but poverty may also
affect the number of international migrants being produced and the level of remittances being received.
Reverse causality. Measurement error.
The good answer could suggest suitable instruments: IV approach
to solve problem Instruments.
