Migration and ethnicity

Mobility is important for the functioning of markets and society. Contributions to this subject area deal with issues of national and international mobility, such as demand and supply, and what migration means for natives and migrants and for sending and receiving countries.

  • Immigrants’ occupational mobility—Down and back up again

    The occupational status of most immigrants initially declines but then increases

    Aslan Zorlu, September 2016
    Evidence suggests that immigrants face an initial decline in their occupational status when they enter the host country labor market but that their position improves as they acquire more country-specific human, cultural, and occupational capital. High-skilled immigrants from countries that are economically, linguistically, and culturally different from the host country experience the greatest decline and the steepest subsequent increase in their occupational status. In the context of sharp international competition to attract high-skilled immigrants, this adjustment pattern is contradictory and discourages potential high-skilled migrants.
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  • Circular migration

    Why restricting labor mobility can be counterproductive

    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.
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  • The Chinese labor market, 2000–2016

    The world’s second largest economy has boomed, but a rapidly aging labor force presents substantial challenges

    Junsen ZhangJia Wu, May 2018
    China experienced significant economic progress over the past few decades with an annual average GDP growth of approximately 10%. Population expansion has certainly been a contributing factor, but that is now changing as China rapidly ages. Rural migrants are set to play a key role in compensating for future labor shortages, but inequality is a major issue. Evidence shows that rural migrants have low-paying and undesirable jobs in urban labor markets, which points to inefficient labor allocation and discrimination that may continue to impede rural–urban migration.
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  • Who benefits from the minimum wage—natives or migrants?

    There is no evidence that increases in the minimum wage have hurt immigrants

    Madeline Zavodny, December 2014
    According to economic theory, a minimum wage reduces the number of low-wage jobs and increases the number of available workers, allowing greater hiring selectivity. More competition for a smaller number of low-wage jobs will disadvantage immigrants if employers perceive them as less skilled than native-born workers—and vice versa. Studies indicate that a higher minimum wage does not hurt immigrants, but there is no consensus on whether immigrants benefit at the expense of natives. Studies also reach disparate conclusions on whether higher minimum wages attract or repel immigrants.
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  • Should countries auction immigrant visas?

    Selling the right to immigrate to the highest bidders would allocate visas efficiently but might raise ethical concerns

    Madeline Zavodny, November 2015
    Many immigrant destination countries face considerable pressure to change their immigration policies. One of the most innovative policies is auctioning the right to immigrate or to hire a foreign worker to the highest bidders. Visa auctions would be more efficient than current ways of allocating visas, could boost the economic contribution of immigration to the destination country, and would increase government revenues. However, visa auctions might weaken the importance of family ties in the migration process and create concerns about fairness and accessibility. No country has yet auctioned visas.
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  • 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

    Anzelika Zaiceva, August 2014
    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.
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  • The impact of aging on the scale of migration

    Older people migrate less than young, yet with population aging, mobility of elderly and specialized workers may increase

    Anzelika Zaiceva, November 2014
    Population aging will continue in the future, in both developed and developing countries. This may lead to lower migration, since the desire to migrate declines later in the life cycle. In addition, indirect labor demand effects may also reduce migration. However, migration of the elderly, return retirement migration, as well as mobility of certain specialist workers such as health and longer-term care providers, may increase. Also, in a family context, the emigration of children may have significant consequences for the elderly left behind, both in terms of poverty risk and health care.
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  • Immigrants and entrepreneurship Updated

    Business ownership is higher among immigrants, but promoting self-employment is unlikely to improve outcomes for the less skilled

    Immigrants are widely perceived to be highly entrepreneurial, contributing to economic growth and innovation, and self-employment is often viewed as a means of enhancing labor market integration and success among immigrants. Accordingly, many countries have established special visas and entry requirements to attract immigrant entrepreneurs. Research supports some of these stances, but expectations may be too high. There is no strong evidence that self-employment is an effective tool of upward economic mobility among low-skilled immigrants. More broadly prioritizing high-skilled immigrants may prove to be more successful than focusing on entrepreneurship.
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  • Who benefits from return migration to developing countries?

    Despite returnees being a potential resource, not all developing countries benefit from their return

    Jackline Wahba, February 2015
    Return 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 developing 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.
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