Labor mobility

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Circular migration

Why restricting labor mobility can be counterproductive

10.15185/izawol.1 1 Zimmermann, K

by Klaus F. Zimmermann

In the popular immigration narrative, migrants leave one country and establish themselves permanently in another, creating a “brain drain” in the sending country. In reality, migration is typically temporary: Workers migrate, find employment, and then return home or move on, often multiple times. Sending countries benefit from remittances while workers are abroad and from enhanced human capital when they return, while receiving countries fill labor shortages. Policies impeding circular migration can be costly to both sending and receiving countries.

Roma integration in European labor markets

Nuclei of evidence tell a grim story, but a veil of ignorance impedes policy efforts

10.15185/izawol.39 39 Kahanec, M

by Martin Kahanec

The Roma are the largest ethnic minority in Europe—as well as one of the most disadvantaged. A triple vicious circle is at play: Substandard socio-economic outcomes reinforce each other; they fuel negative attitudes and perceptions, leading to ill-chosen policies; and segmentation is perpetuated through (statistical) discrimination. A severe lack of data precludes progress. However, existing bits of evidence point to virtuous ways out.

Post-enlargement emigration and new EU members’ labor markets

Outmigration has contributed to increasing wages and decreasing unemployment in the new EU member states but may also cause skills shortages

10.15185/izawol.40 40 Zaiceva, A

by Anzelika Zaiceva

The recent EU enlargements into Central and Eastern Europe and increased labor mobility within the Union provide a unique opportunity to evaluate the labor market effects of emigration. Outmigration has contributed to higher wages for stayers, as well as to lower unemployment in the source country. However, emigration has also exacerbated skills shortages in some sectors, as well as mismatches between skills and jobs.

Freedom of movement for workers

Relaxing immigration restrictions could greatly improve the well-being of people in developing countries, with little effect on wages

10.15185/izawol.86 86 Kennan, J

by John Kennan

Most developed countries have foreign aid programs that aim to alleviate poverty and foster economic growth in less developed countries, but with very limited success. A large body of evidence indicates that the root of the economic development problem is cross-country differences in the productivity of labor. If workers are much more productive in one country than in another, the obvious way to help people in less developed countries is to allow them to help themselves by moving to places where they can be more productive. Yet immigration laws severely constrain such movement.

Income of immigrants and their return

Both low- and high-income immigrants stay for a relatively short time

10.15185/izawol.141 141 Bijwaard, G

by Govert E. Bijwaard

The majority of immigrants stay only temporarily in the host country. When many migrations are temporary, it is important to know who leaves and who stays, and why. The key questions for the host country are whether immigrants are net contributors to the welfare system and whether migrants assimilate quickly. The key questions for the home country are whether migrants return and who returns. The host country gains when unsuccessful migrants leave, while the home country may gain when successful migrants leave. Empirical evidence reveals that both low-income-earning and high-income-earning migrants leave the host country quite soon.

Do minimum wages induce immigration?

The minimum wage affects international migration flows and the internal relocation of immigrants

10.15185/izawol.151 151 Giulietti, C

by Corrado Giulietti

An increase in the minimum wage in immigrant destination countries raises the earnings that low-skilled migrants could expect to attain if they were to migrate. While some studies for the US indicate that a higher minimum wage induces immigration, contrasting evidence shows that immigrants are less likely to move into areas with higher or more frequent increases in the minimum wage. These different findings seem to reflect different relocation decisions by immigrants who have lived in the US for several years, who are more likely to move in response to higher minimum wages, and by new immigrants, who are less likely to move.

Language and culture as drivers of migration

Linguistic and cultural barriers affect international migration flows

10.15185/izawol.164 164 Adserà, A

by Alicía Adserà

As migration flows to developed countries have increased in recent decades, so have the number of countries from which migrants arrive. Thus, it is increasingly important to consider what role differences in culture and language play in migration decisions. Recent work shows that culture and language may explain migration patterns to developed countries even better than traditional economic variables, such as income per capita and unemployment rates in destination and origin countries. Differences in culture and language may create barriers that prevent the full realization of the potential economic gains from international mobility.

Offshoring and the migration of jobs

Offshoring has little net effect on domestic employment, while pushing domestic workers toward more complex jobs

10.15185/izawol.170 170 Ottaviano, G

by Gianmarco Ottaviano

The impact of offshoring on domestic jobs is more complicated than it first appears. In the standard narrative, offshoring production is thought to harm domestic workers by providing cheap alternative sources of labor. However, while offshoring may directly displace domestic workers, the resulting foreign market access and lower production costs allow domestic firms to increase efficiency, expand production, and thus create new jobs for domestic workers. These new jobs often involve more complex tasks, as revealed by the positive relation between the share of offshored jobs and the average cognitive and interactive task content of domestic jobs.

Does corruption promote emigration?

Corruption is a driving force of emigration, especially for high-skilled workers, but also for other workers

10.15185/izawol.192 192 Schneider, F

by Friedrich Schneider

Knowing whether corruption leads to higher emigration rates—and among which groups—is important because most labor emigration is from developing to developed countries. If corruption leads highly-skilled and highly-educated workers to leave developing countries, it can result in a shortage of skilled labor and slower economic growth. In turn, this leads to higher unemployment, lowering the returns to human capital and encouraging further emigration. Corruption also shifts public spending from health and education to sectors with less transparency in spending, disadvantaging lower-skilled workers and encouraging them to emigrate.

Smart policy toward high-skill emigrants

Many proposed policies on skilled migration do little to improve skill stocks or development outcomes, but promising options exist

10.15185/izawol.203 203 Clemens, M

by Michael A. Clemens

Immigration officials in rich countries are being asked to become overseas development officials, charged with preventing skilled workers from leaving poor countries, where their skills are needed. Some advocates urge restrictions or taxes on the emigration of doctors and engineers from developing countries. Others urge incentives to encourage skilled workers to remain or return home or policies to facilitate their interactions with home countries. Regulations often reflect compassionate and political sentiments without clear evidence that the regulations achieve the desired development goals and avoid pernicious side effects.

Cross-border migration and travel: A virtuous relationship

International migration boosts travel and vice versa, bringing economic benefits but challenging public policy

10.15185/izawol.209 209 Poot, J

by Jacques Poot

The ongoing relationships between emigrants and their families, friends, and business contacts in their home countries can increase outbound and inbound cross-border travel, while cross-border tourism and business and study trips can trigger migration. New communication technologies, such as social media and video chat, only partially substitute for face-to-face meetings. In fact, the greater use of such technologies boosts demand for in-person meetings. Short- and long-term cross-border movements are becoming more complex, creating challenges for measuring immigration and for defining target populations for legislation and public policy.

Gravity models: A tool for migration analysis

Availability of bilateral data on migratory flows has renewed interest in using gravity models to identify migration determinants

10.15185/izawol.239 239 Ramos, R

by Raul Ramos

Gravity models have long been popular for analyzing economic phenomena related to the movement of goods and services, capital, or even people; however, data limitations regarding migration flows have hindered their use in this context. With access to improved bilateral (country to country) data, researchers can now use gravity models to better assess the impacts of migration policy, for instance, the effects of visa restriction policies on migration flows. The specification, estimation, and interpretation of gravity models are illustrated in different contexts and limitations of current practices are described to enable policymakers to make better informed decisions.

Legalizing undocumented immigrants

While legalization benefits most undocumented immigrants, deciding how to regularize them is challenging

10.15185/izawol.245 245 Bansak, C

by Cynthia Bansak

Addressing unauthorized immigration is controversial. Countries have adopted a variety of legalization programs, ranging from temporary visa programs to naturalization. Research in the US focused on past amnesty programs finds improved labor market outcomes for newly legalized immigrants. Findings are more mixed for European countries. Studies suggest that regularization of undocumented immigrants can result in increased use of public benefits and reduced formal labor market participation. Despite widespread disagreement, legalization is widely used in practice.

Ethnic networks and location choice of immigrants

Ethnic capital produced by local concentration of immigrants generates greater economic activity

10.15185/izawol.284 284 Maani, S

by Sholeh A. Maani

Immigrants can initially face significant difficulties integrating into the economy of the host country, due to information gaps about the local labor market, limited language proficiency, and unfamiliarity with the local culture. Settlement in a region where economic and social networks based on familiar cultural or language factors (“ethnic capital”) exist provides an effective strategy for economic integration. As international migration into culturally diverse countries increases, ethnic networks will be important considerations in managing immigration selection, language proficiency requirements, and regional economic policies.

The changing nature of citizenship legislation

Concepts of citizenship are not universally defined and need rethinking

10.15185/izawol.322 322 Strozzi, C

by Chiara Strozzi

Citizenship laws are changing in many countries. Although cross-national differences in the laws regulating access to citizenship are today not as large as they were several decades ago, they are still very apparent. Globally, there is convergence over some citizenship policy dimensions, but there is not a general convergence over “liberal” or “restrictive” approaches to citizenship policy. A growing body of research has put forward various comparative measures of citizenship and migrant integration policies. However, selecting the “right” index is a challenging task, and the underlying dynamics of citizenship laws are not easy to interpret as they differ across countries.