Performance of migrants

Do migration policies affect whether immigrants contribute more to public finances than they receive as transfer payments? Yes. But simply accumulating the annual fiscal transfers to and fiscal contributions by migrants is not sufficient to identify the policy impact and the potential need for reform. What is also required is measuring the present value of taxes contributed and transfers received by individuals over their lifespans. Results underscore the need for, and the economic benefits of, active migration and integration strategies.

International trade and migration are two important dimensions of globalization. Although governments have been very willing to open their borders to trade, they have not been so liberal in their immigration policies. It has been suggested, however, that a causal positive link might exist between immigration and trade. Could governments further increase international trade by also opening their doors to immigrants? If they could, does it matter what type of immigrants are encouraged? And is there a saturation level of immigrants after which this positive impact disappears?

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.

What is the role of married women in immigrant households? Their contribution to the labor market has traditionally been considered of secondary importance and studied in the framework of temporary attachment to the labor force to support the household around the time of arrival. But this role has changed. Evidence from major immigrant-receiving countries suggests that married immigrant women make labor supply decisions similar to those recently observed for native-born married women, who are guided by their own opportunities in the labor market rather than by their spouses’ employment trajectories.

In many countries, ethnic minority groups are over-represented in self-employment compared with the majority community. The kind of work done by minority entrepreneurs can therefore be an important driver of the economic well-being of their ethnic group. Furthermore, growing the self-employment sector is a policy objective for many governments, which see it as a source of innovation, economic growth, and employment. While self-employment might offer economic opportunities to minority groups, it is important to understand the factors that underlie the nature and extent of ethnic entrepreneurship to evaluate whether policy measures should support it.

Many countries are reviewing immigration policy, focusing on wage and employment effects for workers whose jobs may be threatened by immigration. Less attention is given to effects on prices of goods and services. The effect on childcare prices is particularly relevant to policies for dealing with the gender pay gap and below-replacement fertility rates, both thought to be affected by the difficulty of combining work and family. New research suggests immigration lowers the cost of household services and high-skilled women respond by working more or having more children.

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.

As global migration flows increase, so do the number of migrant students in host country schools. Yet migrants’ achievement scores lag well behind those of their native-born schoolmates. Performance gaps are explained largely by differences in migrant parents’ socio-economic background, cultural capital, and language skills. Education policy needs to focus on language teaching, parental involvement, diversity training, and beneficial social interaction between immigrant and native-born populations. With the wealth of many industrialized countries threatened by a lack of qualified labor, education of immigrants should be an important priority.

Marriages between immigrants and natives (intermarriages) are often associated with economic success and interpreted as an indicator of social integration. Intermarried immigrant men are on average better educated and work in better paid jobs than nonintermarried immigrant men. In this context, native spouses could deliver valuable insights into the host country and provide business contacts. However, intermarriage may not be the driving factor of economic success but instead be its byproduct, as better education and personal characteristics could be both economically beneficial and increase the likelihood of meeting natives. Intermarriage might also be more “suspense-packed” (positively and negatively) and can thus be associated with an increase in severe stress and a higher risk of divorce.

Language proficiency is a key driver of immigrant integration. It increases job opportunities and facilitates social and political participation. However, despite its vital importance, many immigrants never reach adequate proficiency in the host country language. Therefore, insights into the underlying processes and associated factors are crucial for designing measures to improve language acquisition. Empirical evidence shows that immigrants differ in their ability to learn languages, in their experience of everyday language usage, and their incentives to learn host country languages. This offers a range of opportunities for public policy intervention.