Return migration, wage differentials, and the optimal migration duration

In simple static models, migration increases with the wage differential between host- and home-country. In a dynamic framework, and if migrations are temporary, the size of the migrant population in the host country depends also on the migration duration. This paper analyses optimal migration durations in a model which rationalises the decision of the migrant to return to his home country, despite persistently higher wages in the host country. The analysis shows that, if migrations are temporary, the optimal migration duration may decrease if the wage differential grows larger. Using micro data for Germany, the second part of the paper provides empirical evidence which is compatible with this hypothesis.     

FDI、人力资本积累与经济增长

本文在一个两国内生增长模型中研究了发达国家FDI产业选择与发展中国家经济增长和技术进步问题。本文分析表明,发达国家FDI产业的选择依赖于发展中国家的技术能力和竞争能力,发展中国家技术能力和竞争能力越强,发达国家则倾向于将更多更先进的产业转移到发展中国家;FDI能否给发展中国家带来技术进步和经济增长依赖于发展中国家的人力资本积累,只有辅之以较快速度的人力资本积累,FDI才能给发展中国家带来技术进步和经济增长。因此,普及和改善教育、提高国民的人力资本水平应该成为发展中国家提高自身技术能力、吸引FDI、促进技术进步和经济增长的核心政策。     

FOREIGN CAPITAL AND ECONOMIC GROWTH

This paper examines the economic implications of institutional arrangements by which foreign investors are required to reinvest a certain percentage of their capital within the host country. Our analysis shows that foreign capital inflow can produce long-lasting economic benefits to the host country only when the foreign capital reinvestment rate is sufficiently greater than the host country's saving rate. In this case, the economy evolves into a unique steady state equilibrium, which is also asymptotically stable. The paper also presents several comparative static results regarding the responses of steady state capital-labour ratio and the proportion of foreign capital in total capital to changes in the population growth rate, the rate of capital depreciation, the host country's saving rate and the foreign capital reinvestment rate.     

Risky business: Institutions vs. social networks in FDI

Political economy scholarship on foreign direct investment (FDI) emphasizes variation in host country political risk but overlooks variation in investors' sensitivity to political risk. We show that relational contracting, relationship‐based contract enforcement, is more efficient for high‐risk, human capital‐intensive activities for which the costs of writing legally enforceable contracts are prohibitive. We disaggregate FDI into two distinct varieties: mergers and acquisitions (M&A) and venture capital (VC). We propose that VC flows are less sensitive to host institutions but correlate strongly with skilled migrant networks that monitor compliance and impose reputational costs. Our empirical analysis of dyadic VC and M&A flows covers over 100 countries during 1980–2009. We address other mechanisms through which migrant networks facilitate FDI and verify our results hold at the country‐industry level. These findings suggest that relational contracting facilitates global integration of dynamic, knowledge‐intensive industries even when formal institutions are weak.     

Investment in identity in the field-Nudging refugees’ integration effort

Social identity greatly affects behavior. However, less is known about an individual’s investment in identification, i.e., in belonging to a social group. Using a language-learning platform utilized by refugees to learn the host country’s language, we design a field experiment that allows us to make effort as an investment in a new group identity salient. The social identity in our treatment is a refugee’s identification with the host society. We modified a mailing to 5600 refugees who use an online language-learning platform to learn the host country’s language. These treatment emails make salient that improving the host country’s language ability increases the belonging to the host society. Our analysis reveals that the treatment has a significant positive effect on the effort exerted on the language-learning platform, leading to more completed exercises and more time spent learning the host country’s language. This suggests that refugees invest in becoming part of the host country’s society for its social identity component. Our findings can inform policy considerations on the use of nudges for other integration measures intended for refugees and immigrants in general.     

Literacy and the Migrant–Native Wage Gap

Being able to read and write is one of the most important skills in modern economies. Literacy frequently is a prerequisite for employment and its relevance for productivity and wages is magnified by the fact that it is only through literacy that many other skills become usable. More so than for natives, this argument applies to migrants: even those with high levels of human capital acquired in the country of origin often have it rendered worthless by the absence of literacy in the host‐country language. Using novel data from a large‐scale German adult literacy test (“leo.—Level‐One Studie”, or “LEO”), we investigate the determinants of literacy and show that migrants have systematically lower language skills than natives. We find that any observed raw employment and wage gaps between natives and migrants can be fully explained by these differences.     

From engineer to taxi driver? Language proficiency and the occupational skills of immigrants

We examine the ability of immigrants to transfer the occupational human capital they acquired prior to immigration. We first augment a model of occupational choice to study the implications of language proficiency on the cross‐border transferability of occupational human capital. We then explore the empirical predictions using information about the skill requirements from O^*NET and a unique dataset that includes both the last source country occupation and the first four years of occupations in Canada. We supplement the analysis using Census estimates for the same cohort with source country occupational skill requirements predicted using detailed human capital related information such as field of study. We find that male immigrants to Canada were employed in source country occupations that typically require high levels of cognitive skills, but rely less intently on manual skills. Following immigration, they find initial employment in occupations that require the opposite. Consistent with the hypothesized asymmetric role of language in the transferability of previously acquired cognitive and manual skills, these discrepancies are larger among immigrants with limited language fluency.     

Return migration, human capital accumulation and the brain drain

In this paper we present a model that explains migrations as decisions that respond to where human capital can be acquired more efficiently, and where the return to human capital is highest. The basic framework is a dynamic Roy model in which a worker possesses two distinct skills that can be augmented by learning by doing. There are different implicit prices, in different countries and different rates of skill accumulation. Our analysis contributes to the literature on the selection of immigrants and return migrants by offering a richer framework that may help to accommodate selection of emigrants and return migrants that are not immediately compatible with the one-dimensional skill model. Our analysis also has implications for the debate on brain drain and brain gain. In the two skills model presented here, return migration can lead to a mitigation of the brain drain, or even the creation of a “brain gain”, where those who return bring the home country augmented local skills.     

Romanians,Hungarians and their wages,in transition,in Romania

Legally binding treaties or memorandums have been used over time to regulate the issue of national borders of many European countries. As a result, relatively large groups of people have become ethnic minorities in other countries. They may conserve their ethnic identities, and therefore their children may accumulate ethnic human capital (e.g., language, culture, and religion) in addition to the general human capital of the country. Therefore, they can get access to an appropriate occupation linked by tradition or other factors to their ethnic group. This paper uses estimates from a selection model with an endogenous switch among three broad types of occupational groups to analyze the composition of the wage gap between Romanians and ethnic Hungarians in Romania before and during the transition from a planned to a market economy. The results suggest that the institutional settings of the controlled economy allowed Romanians to work in occupations that gave them the best returns, while the changes during the transition years allowed ethnic Hungarians to work in occupations that gave them the best returns.     

社会资本、人力资本与经济增长

笔者采用截面数据回归分析法及时间序列数据协整分析法对中国社会资本的不同维度——信任和民间组织与人力资本、经济增长的关系进行实证研究。结果表明,我国社会资本通过影响人力资本而影响经济增长,人力资本是我国社会资本作用于经济增长的机制之一。     

The Interaction Between FDI and Infrastructure Capital in The Development Process

This paper focuses on the possible interaction between foreign direct investment (FDI) and the host country’s infrastructure base. Its central hypothesis is that the effect of FDI on per capita real income depends, at least in part, on the size of the recipient country’s infrastructure. This hypothesis is tested in a panel of 46 countries and 5-year averages over the 1980–2000 period using the size of three types of infrastructure capital: telecommunication, power generation, and network of roads or highways. The results indicate that the size of the host country’s infrastructure base helps to improve the marginal effect of FDI on real income.     

Gender equality and economic growth in Brazil: A long-run analysis

This paper studies the long-run impact of policies aimed at fostering gender equality on economic growth in Brazil. The first part provides a brief review of gender issues in the country. The second part presents a gender-based, three-period OLG model that accounts for women’s time allocation between market work, child rearing, human capital accumulation, and home production. Bargaining between spouses depends on relative human capital stocks, and thus indirectly on access to infrastructure. The model is calibrated and various experiments are conducted, including investment in infrastructure, a reduction in gender bias in the market place, and a composite pro-growth, pro-gender reform program. The analysis showed that fostering gender equality, which may partly depend on the externalities that infrastructure creates in terms of women’s time allocation and bargaining power, may have a substantial impact on long-run growth in Brazil.     

TEMPORARY EMIGRATION AND WELFARE: THE CASE OF LOW‐SKILLED LABOR

This article studies the implications of temporary emigration for the welfare of a source country. The framework is one of general equilibrium, where the economy's stocks of both capital and labor are endogenously determined by the saving and migration decisions of optimizing agents. Simulations of the model suggest that for realistic values of the parameters, welfare of nonmigrants of the source country is maximized when the migrants are employed abroad for a period in the range of roughly 8–12 years. The ideal duration is found to be an increasing function of the international wage differential, migration costs, and the degree to which the rights of migrants are protected in the host country.     

Capital markets integration, growth and income distribution

The paper considers a two-country model of overlapping generation heterogenous economies with intergenerational transfers carried out in the form of bequest and investment in human capital. We examine in competitive equilibrium the transitory and long-run effects of capital markets integration. First, we explore how the regime of public education affects the dynamics of the integrated economy. Second, we study the effects of capital markets integration, in equilibrium, on the intragenerational income distribution in both the host and investing country.     

Foreign Direct Investment,Female Education,Capital Formation,and Economic Growth in Japan and South Korea

ABSTRACT

The influence of foreign direct investment (FDI) on host country‘s economic growth is a widely explored issues in the existing economic literature. This study attempts to examine the role of foreign direct investment, capital formation, and expansion of female education on economic growth of Japan during the period 1971–2014, using time series observations. The study further makes a comparison regarding the association with FDI and economic growth with South Korea, another major OECD economy of Asia The study utilises the auto-regressive distributed lag (ARDL) bounds approach to cointegration to examine the long run causality association among the variables. Today, for sustainable economic development the social and institutional policy issues are important. The paper explores one such social issue, namely gender and economic prosperity. This paper has novel contributions in the current research on time series, econometric analysis for the following reasons: (1) it has investigated the relationship between economic growth, foreign direct investment and capital formation in a gendered differential framework (utilising the role of human capital formation among men versus women; (2) the study covers a long period and more recent time period (till 2014), which concurs with the upsurge of world FDI movements and (3) the study also explores the major structural breaks of the two economies and how economic growth is impacted thereof.     

On the choice between capital import and labor export

The paper analyses some questions arising in connection with inflow of foreign capital into a host country and its free zone. When capital is mobile between sectors capital import into any part of the economy decreases welfare. With sector-specific capital, import of capital into the protected sector (export sector) decreases (increases) welfare. If capital import into the export sector of the domestic zone is infeasible, there may be a case for establishing a free zone and allowing capital import exclusively there. With a suitable tax policy, capital import into the free zone will always be beneficial.     

Multinational Firms, International Knowledge Flows, and Dual Labor Markets in Developing Economies

This paper seeks to explain how the expansion of multinational firms in a developing economy affects its labor market variables, such as wages in indigenous firms, the average wage level and total employment. Three potential effects: the transfer of foreign knowledge and the associated technological change, diffusion of this knowledge among indigenous firms, and the inflow of the physical capital from abroad, are examined under two possible scenarios: fixed and unlimited labor supply. The results obtained depend on the organization of the labor market in the host country, differences in capital intensity between multinational and local sectors, the amount of physical capital transferred to the host country from abroad, as well as the magnitude of knowledge spillovers stemming from multinational activity to indigenous firms. The predictions of the model are more consistent with empirical observations reported in empirical studies than those of other theoretical studies existing in the literature.     

Differential Migration Prospects,Skill Formation,and Welfare

This paper develops a one sector, two‐input model with endogenous human capital formation. The two inputs are two types of skilled labor: “engineering,” which exerts a positive externality on total factor productivity, and “law,” which does not. The paper shows that a marginal prospect of migration by engineers increases human capital accumulation of both types of workers (engineers and lawyers), and also the number of engineers who remain in the country. These two effects are socially desirable, since they move the economy from the (inefficient) free‐market equilibrium towards the social optimum. The paper also shows that if the externality effect of engineering is sufficiently powerful, everyone will be better off as a consequence of the said prospect of migration, including the engineers who lose the migration “lottery,” and even the individuals who practice law.     

Redistribution, Fiscal Competition, and the Politics of Economic Integration

The paper examines the consequences of the economic integration of factor markets in a model with two countries that redistribute income among their residents. The social benefits in each country are financed by a source based tax on capital which is democratically chosen by its inhabitants. If either capital or labour is internationally mobile, the countries engage in fiscal competition and the partial integration of capital or labour markets is detrimental to the countries' redistributive ability. A move from partial to full integration, however, may alleviate rather than intensify fiscal competition, particularly, if the two countries face sufficiently similar economic and political conditions. In such a situation, for example, tax competition for mobile capital is softened as the labour market becomes more integrated and even vanishes if both factors are fully mobile. As a result, there is more redistribution in equilibrium and a majority of the population in each country is strictly better off.     

Temporary Migration and the Flow of Savings to the Source Country

The saving behavior of temporary migrants when the duration of their stay abroad is set by the immigration policy of the host country is studied in this paper. The focus is on the implied flow of savings back to the source country and how it depends on migration costs, duration of the work permit, and international wage, interest and price‐level differentials. The amount of time that migrants are allowed to work in the host country is shown to be a key policy variable that affects the flow of savings repatriated to the source country.