week five - migrations

Question 1

most important migration paths

Answer 1

• Importance of migration within Africa, within Asia and within Europe
• High migration flows from Africa to Europe
• High migration flows from Asia to Europe and North America
• Significance of migration from Latin America to North America
• Europe, the Gulf area and some East Asian countries have become important emigration destinations, while emigration to Latin America and Africa has declined

Question 2

why do people migrate

Answer 2

push and pull factors
- economic: employment, higher wages
- social: welfare, education
- other: conflict, absence of democracy

Question 3

what are the macro and micro drivers of migration

Answer 3

macro
- environmental
- political
- social
- economic
- demographic
micro (personal characteristics and attitudes):
- individual characteristics

Question 4

what makes migration easier

Answer 4

• reduction of transport costs
• income levels: when they are low, emigrating is harder
• emigration chains: ease of arrival etc.

Question 5

what is the difference in the impact and the effectiveness of migration policies

Answer 5

• impact: the impact of a given migration policy
• effectiveness: the extent to which the objectives of a given migration policy have been achieved

Question 6

when were the most restrictive migration policies implemented

Answer 6

during and after the great depression of 1929

Question 7

what happened between 1950 and 1980 regarding migration policies

Answer 7

further tightening of migration policy

Question 8

is it easier for skilled or unskilled workers to migrate

Answer 8

skilled workers migrate easier due to policies selecting the type of immigrants allowed

Question 9

impact of migration on wage convergence

Answer 9

• labour leaves from a country where wages are lower to a country where wages are higher
• labour supply decreases in country of origin so wages go up
• vice versa for the destination country
• the result of migration is convergence in wage

Question 10

impact of migration on inequality

Answer 10

• inequality decreases in country of origin because the supply of unskilled labour decreases
• at the destination there is higher competition between unskilled workers and migrants but none for skilled workers (labour market segmentation)

Question 11

positive impact of migration on host country

Answer 11

• emigrants are younger and so the birth rate will increase
• abundant employment
• more tax collection
• increased cultural diversity

Question 12

negative impact of migration on host country

Answer 12

1) unclear on where migration increases domestic employment
2) unclear impacts on wages, segmented markets (complements or substitutes)
3) immigrants tend to be polarised in skills, high/low skilled, i.e. net effect on wages for native workers is small
- when migrants are unskilled, wage inequality increases
4) impact on public expenditure
5) impact on productive structure and specialisation
6) integration of policies to reduce discrimination

Question 13

examples of where immigrants are low/high skilled

Answer 13

• USA: most are low-skilled, inflow of immigrants can have a negative impact on the wages of natives
• UK: most immigrants are skilled, doesn’t have a negative impact of native wages

Question 14

what are the different outcomes of public expenditure on the host country post migration

Answer 14

• changes in revenue and expenditure
• if most immigrants are unskilled, and the tax system is progressive, their net contribution will be low and expenditure will tend to exceed revenue, the situation is aggravated if there are many unauthorised migrants
• if most immigrants are skilled, and the tax system is progressive, contributions will be high and the net balance between income and expenditure may be positive
• the fiscal impact of immigration may be positive or negative depending on the characteristics of migrants; younger migrants who are employed tend to be net fiscal contributors

Question 15

positive effects on home country post migration

Answer 15

• benefits for those who migrate
• remittances can alleviate poverty but doesn’t help with economic growth if it only goes to consumption, but can have a positive impact on investment
• it relaxes the labour market by allowing wages to rise, depending on the level of excess labour
• emigration can lead to business improvements, opportunity to learn through training abroad and bringing it back to the home country

Question 16

negative effects on home country post migration

Answer 16

• loss of human capital, brain drain
• modest effects on domestic wages (empirical)

Question 17

are trade and migration substitutes or complements

Answer 17

traditional theory says that they are substitutes, trade reduces the incentive to migrate by encouraging wage convergence, growth and poverty reduction

more recently, they have complementary characteristics as trade between countries implies interaction between people, trade also leads to economic change, also there exists nostalgia trade, the selling of goods through extorting individuals’ feelings of nostalgia

• empirical evidence concludes that exports leads to growing migration

Question 18

labour market integration in the first vs second globalisation

Answer 18

1st: international migration was the main globalisation factor (size and impact on wage convergence)
- 2nd: wage dispersion (between skilled and unskilled workers) is greater than the difference in the prices of goods or the difference in interest rates, which indicates that labour market integration is lower due to restrictive migration policies