The Effect of Foreign Direct Investment on International Migration: Does Education Matter?

Using migration data in 1990 and 2000, we find that inward foreign direct investment (FDI) in non‐OECD countries affects the out‐migration of individuals with tertiary and secondary education to OECD countries originating the investments, but has no significant effect on the out‐migration of individuals with primary education. Distinguishing between linkage and home effects, our results show a dominant home effect of FDI for individuals with tertiary education, but a stronger linkage effect for those with secondary education. The existing stock of former migrants in foreign countries influences the out‐migration of individuals with primary education.     

Factor rewards and the international migration of unskilled labor: a model with capital mobility

"Conventional economic wisdom holds that the migration of unskilled labor from less developed countries to neighboring developed countries should be expected to narrow the wage gap between those countries, and thereby reduce the incentive for further migration. [The authors suggest that] if capital is mobile internationally this reasoning may be inappropriate. Instead, emigration of unskilled labor out of the less developed country provides an incentive for capital to leave the country, too. As a consequence, wage rates move in the same direction in each country, and the gap between wage rates across countries even may increase."     

Is the EU's labour market threatened by a wave of immigration?

As the accession negotiations continue between the European Union and the Central and Eastern European Countries, Germany in particular fears that granting free movement of labour to these countries might generate a wave of new entrants that could overwhelm its labour market. The following article uses migration determinants and draws on previous experience of integrating countries into the EU in an attempt to reach conclusions about migration patterns that may result from the forthcoming eastward enlargement.     

Economic Crises and Migration: Learning from the Past and the Present

This article considers the effects of past economic crises and cycles on migration with a view predicting the effects of the crisis of 2008–10. It then uses very recent data to test these as hypotheses. It examines the great migration to the New World in the nineteenth century (including in response to the Irish potato blight) in some detail because this was largely unhampered by changes in migration policy. It then more briefly looks at twentieth‐century experience – the 1930s, the 1970s and Asia in 1997–98. The hypotheses tested are that migration is reduced by downturns in destination countries but hardly affected by the cycle in home countries; that such downturns also lead to some return migration; that existing migrants suffer the effects of downturns more severely than natives and that although downturns may affect the timing of migration policy changes, the latter owe more to underlying secular forces than to short‐term shocks. Data from 2008–09 suggest support for each of these hypotheses.     

跨国移民、人力资本结构与技术创新

本文在"新人才流失经济学"的框架下,以分工理论为基础,分析了跨国移民对于发展中国家人力资本结构及技术创新的影响。分析显示,由于较低的知识存量和较高的协调成本,在技术水平较为落后的移民来源国,熟练劳动力通常更倾向于选择通才教育,从而独立进行创新活动。相反,在技术较为先进的移民目标国,熟练劳动力则更倾向于选择专才教育,从而以分工合作的方式从事创新活动。受国内外协调成本差异的影响,跨国移民会激励移民来源国的劳动力更多的选择专才教育,从而改变移民来源国人力资本的结构并影响技术创新的效率。     

Trade and migration flows between some CEE countries and the UK

The recent enlargement of the European Union (EU) has enhanced interest in the causes and also the consequences of migration between Central and Eastern European (CEE) and Western European countries. This paper considers the possibility that some of these consequences make themselves felt in the trade flows between migrants' countries of origin and destination. Using a panel of data covering a number of CEE countries between 1996 and 2003, we employ an augmented gravity model to examine the effects of immigration from these transition countries on their bilateral trade flows with the UK. We pay attention to a number of issues that have been raised within the literature on gravity models. We find evidence that migration positively enhances the bilateral exports of the migrants' home country; however, there is less (but some) evidence that the imports from their destination country are also enhanced.     

Labour Migration and Economic Growth in East and South‐East Asia

East and South‐East Asia will face major demographic changes over the next few decades with many countries’ labour forces starting to decline, while others experience higher labour force growth as populations and/or participation rates increase. A well‐managed labour migration strategy presents itself as a mechanism for ameliorating the impending labour shortages in some East Asia–Pacific countries, while providing an opportunity for other countries with excess labour to provide migrant workers who will contribute to the development of the home country through greater remittance flows. This paper examines such migration policy options using a global dynamic economic simulation approach and finds that allowing migrants to respond to the major demographic changes occurring in Asia over the next 50 years would be beneficial to most economies in the region in terms of real incomes and real GDP over the 2007–50 period. Such a policy could deeply affect the net migration position of a country. Countries that were net recipients under current migration policies might become net senders under the more liberal policy regime.     

Structural Change,Economic Crisis and International Labour Migration in East Asia

Increased international labour migration was one important dimension of structural change and globalisation in East Asia from the mid 1980s. Large international movements of mainly unskilled contract labour occurred in response to widening wage gaps between more and less developed countries in the region as the former experienced rapid structural change. Labour importing countries increasingly relied on unskilled migrant workers in less preferred jobs, in both export‐oriented and non‐tradable goods industries. The Asian economic crisis dramatically influenced the context in which international labour mobility had occurred in the pre‐crisis period. Important issues included a possible reversal in role of international migration in structural change, both among unskilled contract workers and more skilled migrants, and replacement of migrants by unemployed local workers. The paper argues that the Asian economic crisis did not reverse the fundamental trend toward greater reliance on unskilled migrant workers in agriculture, manufacturing and service industries. Business and professional migration remained significant and even rose in some countries during the crisis. However, several countries were forced to develop a more coherent policy towards migrant workers, in light of the social impact of the crisis.     

Rural migration and regional development

"Regional disequilibria in the distribution of population lead in many developing countries to migration flows which cannot always be equated with flight from the land or drift to the cities. In diverse countries rural-rural migration is even supported by the state. This rural migration leaves a decisive mark not only on the regional development of the areas from which emigration takes place but also on the absorbing areas. The following article examines the costs and benefits for both [using the example of Indonesia]."     

Two‐Way Migration between Similar Countries

We develop a model to explain two‐way migration of high‐skilled individuals between countries that are similar in their economic characteristics. High‐skilled migration results from the combination of workers whose abilities are private knowledge, and a production technology that gives incentives to firms for hiring workers of similar ability. In the presence of migration cost, high‐skilled workers self‐select into the group of migrants. The laissez‐faire equilibrium features too much migration, explained by a negative migration externality. We also show that for sufficiently low levels of migration cost the optimal level of migration, while smaller than in the laissez‐faire equilibrium, is strictly positive. Finally, we extend our model into different directions to capture stylised facts in the data and show that our baseline results also hold in these more complex modelling environments.     

Guest worker programs: A theoretical analysis of welfare of the host and source countries*

This article examines the interaction between migration policies of the host and source countries in the context of a model of guest-worker migration. For the host, the objective is to provide low-cost labor for its employers while avoiding illegal immigration. It optimizes over these objectives by setting the time limit of a guest-worker permit. The source country seeks remittance flows and return migration by offering fiscal benefits to returnees. Within this framework, we solve for the Nash equilibrium values of the migration policy instruments and compare them, to the extent possible, with the ones that emerge in a cooperative setting.     

The employment of foreigners in Western European industrial countries

Not least due to the change in overall economic conditions, the employment of foreign workers in Western Europe has in recent years become increasingly controversial. The following two articles deal with different aspects of labour migration. Heinz Werner presents a survey of policies towards foreign workers and their families in the various countries of Western Europe and discusses possible future developments. Thomas Straubhaar examines the significance of northward migration for the economies of the Southern European countries of origin.     

The determinants of international migration: Unbundling the role of economic,political and social institutions

International migrants may relocate because of economic, political and social factors in their origin or destination countries. Using global bilateral migration flows from 103 countries over the period 1990–2000, we explore whether emigrants self-select based on economic, political and social institutions. Our study adds social dimension as a potential determinant of migration and separates the pull and push effects of political, economic and social institutions. Our results indicate that economic, political and social institutions are significant pull factors of migration; economic freedom has the most substantial pull effect followed by the political institutions; social institutions have the weakest pull effect on migration. Moreover, economic and social institutions are significant push factors of migration, while political institutions do not show any push effect. Furthermore, educated migrants are more sensitive to the destination economic, political and social institutions than less-educated migrants, and less-educated migrants are more sensitive to the social institutions at the origin.     

Investment liberalisation and firm selection process: A welfare analysis from a host-country perspective

We set up a theoretical model to analyze the implications of coordination of immigration policies among destination countries. The model contains two types of spillovers between destination countries: a terms-of-trade externality and a welfare-policy externality. We show that while coordination unambiguously increases welfare of the destination countries, the effects on the level of immigration and on the income distribution of natives are ambiguous. Thus, coordination among destination countries does not necessarily solve the global coordination problem of inoptimally low levels of migration.     

Migration and trade: Theory with an application to the Eastern-Western European integration

The remarkable increase in trade flows and in migratory flows of highly educated people are two important features of globalization of the last decades. This paper extends a two-country model of inter- and intra-industry trade to a rich environment featuring technological differences, skill differences and the possibility of international labor mobility. The model is used to explain the patterns of trade and migration as countries remove barriers to trade and to labor mobility. We parameterize the model to match the features of the Western and Eastern European members of the EU and analyze first the effects of the trade liberalization which occurred between 1989 and 2004, and then the gains and losses from migration which are expected to occur if legal barriers to labor mobility are substantially reduced. The lower barriers to migration would result in significant migration of skilled workers from Eastern European countries. Interestingly, this would not only benefit the migrants and most Western European workers but, via trade, it would also benefit the workers remaining in Eastern Europe.     

A simple model of brain circulation

This paper analyzes the allocation of two types of individuals differentiated by talent between two countries where they choose to be workers or entrepreneurs. An equilibrium with international migration exists when countries' talent endowments are sufficiently different. It is consistent with one-way or two-way migration whether individuals are entrepreneurs or workers. Although allowing migration increases domestic welfare in one country and decreases it in the other, it is always supported by majority voting in both countries.     

The Economic Impact of Medical Migration: An Overview of the Literature

This paper provides an overview of the evidence and applied literature on medical migration. The economic impacts of medical migration have been little researched, causing a polarisation in the debate between its critics and its proponents. The paucity of quantitative studies may be explained by the lack of comprehensive and consistent data. Investments in statistical resources on medical migration are therefore a major priority. The available evidence suggests that particularly English‐speaking countries in Sub‐Saharan African countries and the Caribbean with relatively few health workers and a high disease burden suffer most from the medical brain drain. However, the exodus of health workers is not the main cause of the health status crisis, but rather a symptom of deeper underlying problems, which often extend beyond the health sector towards the broader economic and political environment. In such situations, medical brain drain does pose challenges for human resource management and health service delivery. The only effective and long‐term sustainable policy is one that addresses the underlying push and pull factors. Reforms have to be country‐led, but may be supported via temporary migration schemes, remittances, enhancement of diaspora networks, and financial aid for which a strong moral case exists.     

Aid,trade and migration: How do bilateral flows interact?

This paper takes as its point of departure the European Commission's position, set out in 2005, which laid clear emphasis on aid and trade as tools for controlling immigration. We attempt to subject this position to empirical investigation. We exploit data on bilateral aid, trade and migration flows between developed and developing countries, for the period 2000–10, adopting an instrumental variable approach to address the endogeneity issue due to potential simultaneity bias. Our results establish that increasing aid and trade with developing countries is likely to fail to contain immigration, at least in the short run. The pattern of results is consistent with the hypothesis that promoting development in migrant‐sending countries, or cooperating with such countries to control migration outflows, is not sufficient to lessen immigration. Increasing visa restrictions and controls at borders is generally controversial; still, the results imply that policymakers cannot attain their short‐term immigration goals with the so‐called smart solutions of aid and trade.     

On the Distribution of Refugees in the EU

The current situation regarding the migration of refugees can only be handled efficiently through closer international cooperation in the field of asylum policy. From an economic point of view, it would be reasonable to distribute incoming refugees among all EU countries according to a distribution key that reflects differences in the costs of integration in the individual countries. An efficient distribution would even out the marginal costs of integrating refugees. In order to reach a political agreement, the key for distributing refugees should be complemented by compensation payments that distribute the costs of integration among countries. The key for distributing refugees presented by the EU Commission takes account of appropriate factors in principle, but it is unclear in terms of detail. The compensation payments for countries that should take relatively high numbers of refugees for cost efficiency reasons should be financed by reallocating resources within the EU budget.     

The influence of retirement systems on the free movement of persons in the European Union

Retirement systems within the EU are extremely complex, and regulations concerning age of retirement and qualifications for benefits differ considerably from country to country. The effects of working in another country are not transparent and can even have a negative effect on a migrant’s pension. The low migration figures between EU countries are partly a result of this situation. What changes could realistically be made in order to encourage more migration?