An introduction to the economics of immigration in OECD countries

The share of the foreign-born population in member countries of the OECD is increasing, and this article summarizes economics research on the effects of immigration in those nations. Four broad topics are addressed: labour market issues, fiscal questions, the political economy of immigration, and productivity and international trade. Extreme concerns about deleterious labour market and fiscal impacts following from new immigrants are not found to be warranted. However, it is also clear that government policies and practices regarding the selection and integration of new migrants affect labour market, fiscal, social and cultural outcomes. Policies that are well informed, well crafted and well executed beneficially improve population welfare.     

Asymmetric information,libertarianism, and fraud

Abstract

This paper argues (a) that while a no-fraud legal requirement does not follow from libertarian first principles, it is not only permitted – but also mandated – by them under certain conditions, and (b) that the claim that some fraudulent exchanges are morally invalid need not appeal to a theory of moral permissibility that is external to those principles.     

Network effects and the dynamics of migration and inequality: Theory and evidence from Mexico

International migration is costly and initially only the middle class of the wealth distribution may have both the means and incentives to migrate, which can increase inequality in the sending community. However, the migration networks formed lower the costs for future migrants, which can in turn lower inequality. This paper shows both theoretically and empirically that wealth has a nonlinear effect on migration, and then examines the empirical evidence for an inverse U-shaped relationship between emigration and inequality in rural sending communities in Mexico. After instrumenting, we find that the overall impact of migration is to reduce inequality across communities with relatively high levels of past migration. We also find some suggestive evidence for an inverse U-shaped relationship among communities with a wider range of migration experiences.     

Rethinking the policy of contracting out Social Services to non-governmental organizations

The article describes, analyzes and evaluates the lessons and dilemmas resulting from the Government's policy of contracting out with non-governmental organizations for the provision of three types of services: foster care, adoption and home care services for the elderly. The dilemmas are: structural tension between governmental control and autonomy of provider organizations; power?–?dependence relations between the Government and the providers, the choice option available to clients; the ethical, moral and professional aspects of contractualism; the myth of innovative programs initiated by provider organizations; service quality versus price of services; and accountability of provider organizations to their stakeholders. Based on the lessons learned, the article highlights the need to rethink the strategy of contracting out and reassess the role of the Government in providing social services.     

EVALUATING THE IMPACT OF LEGAL CHANGE ON NON-PROFIT AND FOR-PROFIT ORGANIZATIONS - The case of the Israeli longterm care insurance law

This article evaluates the impact of legal change on non-profit and for-profit organizations providing home care services mandated in the Israeli Long-Term Care Insurance Law, through the lens of neo-institutional and resource dependency theories. The findings of the study, which was conducted over a ten-year period, revealed that the distinctions between organizations in the two sectors are blurring due to coercive, mimetic, and normative isomorphism. Considerable dependence on government funding provided for in the law forces these organizations to adopt behavior that conforms to government policies and standards for service provision. Moreover, the growing tendency toward mimetic behavior and the increasing proportion of professional workers in both sectors causes for-profit and non-profit organizations to adopt similar bureaucratic behavior and organizational structures.     

Heaven's Swing Door: Endogenous Skills,Migration Networks,and the Effectiveness of Quality‐Selective Immigration Policies

A growing number of OECD countries are leaning toward the adoption of selective immigration policies, which are expected to raise the quality (or education level) of migrants. This view neglects two important dynamic effects: the role of migration networks, which could reduce the quality of migrants, and the responsiveness of education decisions to the prospect of migration. We propose a model of self‐selection into migration with endogenous education choices, which predicts that migration networks and the quality of migrants can be positively associated when destination countries adopt sufficiently selective immigration policies. Empirical evidence, presented as background motivation, suggests that this is indeed the case.     

The brain drain and the world distribution of income

Skilled emigration (or brain drain) from developing to developed countries is becoming the dominant pattern of international migration today. Such migration is likely to affect the world distribution of income both directly, through the mobility of people, and indirectly, as the prospect of migration affects the rate of return to education in both the sending and receiving economies. This migration pattern will therefore affect human capital accumulation and fertility decisions in both the sending and receiving economies. This paper analyzes these effects in a dynamic two country model of the world economy where agents in both countries make optimal fertility and human capital decisions. The implications of the analysis for the world distribution of income are derived in the light of recent empirical findings of the brain drain literature. The analysis shows that the current trend towards predominantly skilled emigration from poor to rich countries may in the long run increase inequality in the world distribution of income as relatively poor countries grow large in terms of population. In the short run however, it is possible for world inequality to fall due to rises in GDP per capita in large developing economies with sufficiently low skilled emigration rates.     

Measuring International Skilled Migration: A New Database Controlling for Age of Entry

Recent data on international migration of skilled workers defineskilled migrants by education level without distinguishing whetherthey acquired their education in the home or the host country.This article uses immigrants' age of entry as a proxy for wherethey acquired their education. Data on age of entry are availablefrom a subset of receiving countries that together represent77 percent of total skilled immigration to countries of theOrganisation for Economic Co-operation and Development. Usingthese data and a simple gravity model to estimate the age-of-entrystructure of the remaining 23 percent, alternative brain drainmeasures are proposed that exclude immigrants who arrived beforeages 12, 18, and 22.     

Birthplace diversity and economic prosperity

We propose an index of population diversity based on people’s birthplaces and decompose it into a size (share of immigrants) and a variety (diversity of immigrants) component. We show that birthplace diversity is largely uncorrelated with ethnic, linguistic or genetic diversity and that the diversity of immigrants relates positively to measures of economic prosperity. This holds especially for skilled immigrants in richer countries at intermediate levels of cultural proximity. We address endogeneity by specifying a pseudo-gravity model predicting the size and diversity of immigration. The results are robust across specifications and suggestive of skill-complementarities between immigrants and native workers.