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Hiring discrimination across vulnerable groups
Discrimination in hiring based on ethnicity or gender is widely debated but appears in fact less severe than discrimination based on disability, appearance, or age
Over the past decades, academics worldwide have conducted experiments with fictitious job applications to measure discrimination in hiring. This discrimination leads to underutilization of labor market potential and higher unemployment rates for individuals from vulnerable groups. Collectively, the insights from the published research suggest that three groups face more discrimination than ethnic minorities: people with disabilities, less physically attractive people, and older people. The discrimination found in Western economies generally persists across countries and is stable over time, although some variation exists.
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The widespread impacts of remittance flows Updated
Remittances have the potential to lift developing economies
Catalina Amuedo-DorantesSusan Pozo, May 2023Remittances have risen spectacularly in absolute terms and in relation to traditional sources of foreign exchange, such as export revenues. Remittances can improve the well-being of family members left behind and boost growth rates of receiving economies. They can also create a culture of dependency, lowering labor force participation in recipient nations, promoting conspicuous consumption, and accelerating environmental degradation. A more thorough understanding of their impacts can help formulate policies that enable developing economies to harness the most out of these monetary inflows.MoreLess -
Temporary migration entails benefits, but also costs, for sending and receiving countries
There are important trade-offs between temporary and permanent migration
Joseph-Simon GörlachKatarina Kuske, November 2022Many migrants do not stay in their host countries permanently. On average, 15% of migrants leave their host country in a given year, many of whom will return to their home countries. Temporary migration benefits sending countries through remittances, investment, and skills accumulation. Receiving countries benefit via increases in their prime-working age populations while facing fewer social security obligations. These fiscal benefits must be balanced against lower incentives to integrate and invest in host country specific skills for temporary migrants.MoreLess -
Does emigration increase the wages of non-emigrants in sending countries Updated
Emigration can increase the wages of non-emigrants, but may eventually lead to lower productivity and wage losses
Benjamin Elsner, March 2022How migration affects labor markets in receiving countries is well understood, but less is known about how migration affects labor markets in sending countries, particularly the wages of workers who do not emigrate. Most studies find that emigration increases wages in the sending country but only for non-emigrants with substitutable skills similar to those of emigrants; non-emigrants with different (complementary) skills lose. These wage reactions are short-term effects, however. If a country loses many highly educated workers, the economy can become less productive altogether, leading to lower wages for everyone in the long term.MoreLess -
Ethnic enclaves and immigrant economic integration Updated
High-quality enclave networks encourage labor market success for newly arriving immigrants
Simone SchüllerTanika Chakraborty, March 2022Immigrants tend to live in clusters within host countries. Does clustering in ethnic enclaves explain the persistent differences in skill, employment rates, and earnings between immigrants and the native population? Empirical studies consistently find that residing in an enclave can increase earnings. While it is ambiguous whether employment probabilities are also affected or whether earnings benefits accrue to all immigrants, irrespective of their skill levels, it is clear that effects are driven by enclave “quality” (in terms of income, education, and employment) rather than enclave size.MoreLess -
Who benefits from return migration to developing countries? Updated
Despite returnees being a potential resource, not all low- and middle-income countries benefit from their return
Jackline Wahba, December 2021Return migration can have multiple benefits. It allows migrants who have accumulated savings abroad to ease credit constraints at home and set up a business. Also, emigrants from low- and middle-income countries who have invested in their human capital may earn higher wages when they return. However, whether the home country benefits from return migrants depends on the migrant's success in accumulating savings and human capital and on the home country's ability to make use of returnees’ skills and investment. To benefit from returnees, home countries need policies that encourage returnees’ investment and labor market reintegration.MoreLess -
How immigration affects investment and productivity in host and home countries Updated
Immigration may boost foreign direct investment, productivity, and housing investment
Volker Grossmann, October 2021Migration policies need to consider how immigration affects investment behavior and productivity, and how these effects vary with the type of migration. College-educated immigrants may do more to stimulate foreign direct investment and research and development than low-skilled immigrants, and productivity effects would be expected to be highest for immigrants in scientific and engineering fields. By raising the demand for housing, immigration also spurs residential investment. However, residential investment is unlikely to expand enough to prevent housing costs from rising, which has important distributional implications.MoreLess -
The impact of legalizing unauthorized immigrants Updated
While legalization benefits most unauthorized immigrants, deciding how to regularize them is challenging
Cynthia BansakSarah Pearlman, May 2021Countries have adopted a variety of legalization programs to address unauthorized immigration. Research in the US finds improved labor market outcomes for newly authorized immigrants. Findings are more mixed for European and Latin American countries where informal labor markets play a large role and programs are often small scale. Despite unclear labor market outcomes and mixed public support, legalization will likely continue to be widely used. Comprehensive legislation can address the complex nature of legalization on immigrants and on native-born residents.MoreLess -
Immigrants in the classroom and effects on native children Updated
Having immigrant children in the classroom may sometimes, but not always, harm educational outcomes of native children
Peter Jensen, April 2021Many countries are experiencing increasing inflows of immigrant students. This raises concerns that having a large share of students for whom the host country language is not their first language may have detrimental effects on the educational outcomes of native children. However, the evidence is mixed, with some studies finding negative effects, and others finding no effects. Whether higher concentrations of immigrant students have an effect on native students differs across countries according to factors such as organization of the school system and the type of immigrants.MoreLess -
The value of language skills Updated
A common language facilitates communication and economic efficiency, but linguistic diversity has economic and cultural value too
Gilles GrenierWeiguo Zhang, March 2021In today's globalized world, people are increasingly mobile and often need to communicate across different languages. Learning a new language is an investment in human capital. Migrants must learn the language of their destination country, but even non-migrants must often learn other languages if their work involves communicating with foreigners. Economic studies have shown that fluency in a dominant language is important to economic success and increases economic efficiency. However, maintaining linguistic diversity also has value since language is also an expression of people's culture.MoreLess