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Linguistic and cultural barriers affect
international migration flows
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.
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While legalization benefits most undocumented
immigrants, deciding how to regularize them is challenging
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.
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Both low- and high-income immigrants stay for a
relatively short time
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.
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Labor productivity is generally seen as bringing
wealth and prosperity; but how does it vary over the business cycle?
Aggregate labor productivity is a central
indicator of an economy’s economic development and a wellspring of living
standards. Somewhat controversially, many macroeconomists see productivity
as a primary driver of fluctuations in economic activity along the business
cycle. In some countries, the cyclical behavior of labor productivity seems
to have changed. In the past 20–30 years, the US has become markedly less
procyclical, while the rest of the OECD has not changed or productivity has
become even more procyclical. Finding a cogent and coherent explanation of
these developments is challenging.
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Many proposed policies on skilled migration do
little to improve skill stocks or development outcomes, but promising
options exist
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.
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One-company towns concentrate employment but
their ability to adapt to adverse events is often very limited
One-company towns are a relatively rare
phenomenon. Mostly created in locations that are difficult to access, due to
their association with industries such as mining, they have been a marked
feature of the former planned economies. One-company towns typically have
high concentrations of employment that normally provide much of the funding
for local services. This combination has proven problematic when faced with
shocks that force restructuring or even closure. Specific policies for the
redeployment of labor and funding of services need to be in place instead of
subsidies simply aimed at averting job losses.
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The minimum wage affects international migration
flows and the internal relocation of immigrants
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.
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With rising international migration, how
transferable are benefits, and how can transferability be increased?
The importance of benefit portability is
increasing in line with the growing number of migrants wishing to bring
acquired social rights from their host country back to their country of
residence. Failing to enable such portability risks impeding international
labor mobility or jeopardizing individuals’ ability to manage risk across
their life cycle. Various instruments may establish portability. But which
instrument works best and under what circumstances is not yet
well-explored.
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Nuclei of evidence tell a grim story, but a veil
of ignorance impedes policy efforts
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.
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Relaxing immigration restrictions could greatly
improve the well-being of people in developing countries, with little effect
on wages
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.
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