The Economics of Immigration

Name: The Economics of Immigration | Theory and Policy
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Theory and Policy

Örn B. Bodvarsson Hendrik Van den Berg(Author)

Springer (Publisher)

2nd Edition

Published on 17. May 2013

XV, 474 pages

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Content

Intro
Contents
Chapter 1: Introduction to Immigration Economics
1.1 The Late Twentieth-Century Immigration Explosion
1.1.1 The Complexity of Immigration
1.1.2 Not Everyone Likes Immigrants
1.1.3 Economists´ Perspective
1.2 The Determinants of Immigration
1.2.1 Many Factors Discourage Immigration
1.2.2 Considering the Full Set of Push, Pull, Stay, and Stay Away Factors
1.2.3 Shifts in Economic Forces Influence Immigration
1.2.4 Immigration Is a Complex Phenomenon
1.3 A Brief History of Immigration
1.3.1 Early Migrations
1.3.2 Recent Immigration
1.4 There Are Many Types of Immigrants
1.4.1 Not All Immigrants Are Permanent Settlers
1.4.2 Forced Immigration
1.4.3 Some Immigrants Are Difficult to Classify
1.5 The Purpose and Organization of this Book
References
Part I: Immigration Theory and Evidence
Modeling Immigration
The Basic Labor Market Model of Immigration
Who Gains and Who Loses with Immigration?
Building on the Basic Labor Market Model
Chapter 2: The Determinants of International Migration: Theory
Chapter Overview
2.1 Early Migration Theory
2.1.1 Pre-1960 Theory
2.1.2 Ravenstein and Zipf
2.1.3 The Standard Modern Theory of Migration
2.1.3.1 The Migrant as Investor in Human Capital
2.1.3.2 The Migrant as Consumer
2.1.3.3 The Migrant as Household Producer
2.1.4 Further Influences on Migration
2.1.4.1 The Role of Past Migration
2.1.4.2 Migration as a Life Cycle Decision
2.1.4.3 The Expected Income Hypothesis
2.2 The Modern Model of Immigration
2.2.1 The First Borjas Model
2.2.1.1 The General Intuition of the First Model
2.2.1.2 The Specification of the Model
2.2.1.3 The Predictions of the Model
2.2.2 Borjas´ 1991 Model
2.2.3 Recent Extensions of the Borjas Model
2.2.3.1 The CHW Model
2.2.3.2 Migration as a Response to Relative Deprivation
2.2.3.3 Migration as Sequential Search and the Option Value of Waiting
2.3 The Family or Household as the Decision-Making Unit
2.3.1 Conflicting Interests and the Family Migration Decision
2.3.2 Mincer´s Model
2.3.3 Family Migration as a Portfolio Decision
2.4 Summary and Conclusions
References
Chapter 3: Why People Immigrate: The Evidence
Chapter Overview
3.1 Regression Models of Immigration
3.1.1 Empirical Models of Regional Migration
3.1.2 The Gravity Model of International Migration
3.1.2.1 The Basic Gravity Model of Migration
3.1.2.2 The Augmented Gravity Model
3.1.2.3 Generalizing the Gravity Model
3.1.3 Some Econometric Problems Related to the Gravity Model
3.2 The Choice of Variables in Statistical Models of Immigration
3.2.1 Three Examples
3.2.2 Representing Income Differences
3.2.3 Representing Migration Costs
3.2.4 Representing Source Country Development
3.2.5 Representing Immigration Restrictions
3.2.6 The Empirical Evidence on the Determinants of Migration
3.2.7 Evidence on Worldwide Migration
3.2.8 Evidence on Migration to Groups of OECD Countries
3.2.9 Evidence on US Immigration
3.2.10 Immigration to Other Countries
3.2.11 Summarizing the Results
3.3 Summary and Concluding Remarks
3.3.1 The Power of Statistical Models
3.3.2 The Way Forward
References
Chapter 4: Who Immigrates? Theory and Evidence
Chapter Overview
4.1 Immigrant Selection: The Chiswick vs. Borjas Debate
4.1.1 Some Unfortunate Terminology
4.1.2 The Chiswick View
4.1.3 The Borjas Model
4.1.4 A More Detailed Look at the Borjas Model
4.1.5 Selection by Observed Characteristics
4.2 Extensions of the Borjas Model
4.2.1 Variable Migration Costs and Migrant Selection
4.2.2 Credit Constraints and Immigrant Selection
4.2.3 Family Migration and Selection Bias
4.3 The Empirical Evidence on Immigrant Selectivity
4.3.1 Borjas´ Empirical Results
4.3.2 Further Tests of Borjas´ Model
4.3.3 Tests Based on Counterfactual Density Functions
4.4 The Asymmetric Information Model
4.4.1 Kwok and Leland´s Model
4.4.2 Restoring Symmetric Information
4.5 The Theory of Immigrant Assimilation
4.5.1 The Chiswick Study of Assimilation
4.5.2 Potential Bias in Chiswick´s Results
4.5.3 Borjas´ Empirical Results
4.6 Addressing Borjas´ Critique
4.7 Conclusions
References
Chapter 5: The Effects of Immigration on the Destination Economy: The Theory
Chapter Overview
5.1 The Macro Effects of Immigration
5.1.1 Homogeneous Labor with Fixed Capital
5.1.2 Homogeneous Labor with Variable Capital
5.1.3 Heterogeneous Labor
5.1.4 Heterogeneous Labor with Constant Capital
5.1.5 Heterogeneous Labor and Perfectly Elastic Capital Supply
5.1.6 How Big Is the US Immigrant Surplus?
5.2 Detailing the Distributional Effects of Immigration
5.2.1 The Johnson Model (1980)
5.2.2 The Altonji and Card Model (1991)
5.2.3 The Ottaviano and Peri Model
5.2.3.1 Temporary Effects on the Capital-Labor Ratio
5.2.3.2 Positive Feedback Effects on Workers in Different Education Cells
5.2.3.3 Negative Feedback Effects on Workers That Have the Same Education, But Different Experience
5.3 Long-Run Adjustment Processes
5.3.1 Internal Migration Responses
5.3.2 Multiple Goods
5.3.3 Choice of Technology
5.3.4 The Demand Effect of Immigration
5.4 The Demand Effect of Immigration
5.4.1 Say´s Law of Immigration
5.4.2 Regional Migration and Local Demand
5.4.3 A Few Models of Immigrant Demand Effects
5.4.4 Bodvarsson and Van den Berg´s Lexington Model
5.4.5 The More General Case
5.4.6 Further Models of Immigrant Demand Effects
5.5 Concluding Remarks
References
Chapter 6: How Immigration Impacts the Destination Economy: The Evidence
6.1 Introduction
6.2 The Spatial Correlation Method
6.2.1 Cross Section Applications
6.2.2 Dealing with Simultaneity and Spurious Correlation
6.2.3 Recent Applications of the Spatial Correlation Method
6.2.4 Applications of the Unexpected Exogenous Supply Shock Method
6.2.5 The Mariel Boatlift
6.2.6 Russian Immigrants in Israel
6.2.7 Assessing the Spatial Correlation Method
6.3 The Production Function Method
6.3.1 Grossman´s Pioneering Production Study
6.3.2 Gang and Rivera-Batiz
6.3.3 Assessing the Production Function Method
6.4 The Skill Cell Approach
6.4.1 Borjas´ Use of National Data Versus Regional Data
6.4.2 Ottaviano and Peri´s Extension of Borjas´ Skill Cell Model
6.4.3 Other Types of Labor Market Cells
6.5 Concluding Remarks
References
Chapter 7: Estimating Immigration´s Impact: Accounting for All Adjustments
7.1 Introduction
7.2 Does Immigration Trigger Internal Migration?
7.2.1 Evidence That Immigrants Induce Native Out-Migration
7.2.2 Evidence That Immigration Has Little Effect on Native Out-Migration
7.3 Migration Biases Estimates of Immigration´s Wage Effect
7.4 Does Immigration Change Industry Structure?
7.5 Measuring the Demand Effects of Immigration
7.5.1 Hercowitz and Yashiv´s Estimates
7.5.2 Bodvarsson and Van den Berg´s Lexington, Nebraska, Study
7.5.3 Estimating the Demand Effect of the Mariel Boatlift
7.5.4 Additional Estimates of the Demand Effects of Immigration
7.6 The Costs of Government Services for Immigrants
7.6.1 Recent Studies for the USA
7.6.2 Are US Immigrants More Costly Today than in the Past?
7.6.3 Estimates of Fiscal Costs for Other Countries
7.7 Immigration´s External Effects
7.7.1 Economies of Scale
7.7.2 Are There Negative Externalities Associated with Immigration?
7.8 Concluding Remarks
References
Chapter 8: Immigration and the Source Country
8.1 Remittances and Demand Effects in the Source Country
8.1.1 Supply and Demand Effects
8.1.2 Immigrants and Remittances
8.1.3 A Two-Country View of Remittances
8.2 What We Know About Immigrant Remittances
8.2.1 The Growth of Immigrant Remittances
8.2.2 Remittances as a Percentage of Source Country GDP
8.2.3 The Reliability of Remittance Data
8.2.4 The Recent Data on the Growth of Immigrant Remittances
8.2.5 Policies to Encourage Remittances
8.2.6 How Remittances Are Used in the Source Countries
8.2.7 Remittances: Tentative Conclusions
8.3 The Brain Drain
8.3.1 Human Capital of Immigrants
8.3.2 The Brain Drain as a Development Issue
8.3.3 How Big Is the Brain Drain?
8.3.4 Why Human Capital Flees Capital-Scarce Countries
8.3.5 Brain Drain and Brain Waste
8.4 A Reassessment of the Brain Drain
8.4.1 Remittances Again
8.4.2 The Brain Drain as an Incentive to Seek Education
8.4.3 A Simple Case
8.4.4 A More Realistic Case
8.5 Conclusions
References
Chapter 9: Economic Growth and Immigration
9.1 The Early Models of Economic Growth
9.1.1 Adam Smith´s Broad View of Growth
9.1.2 The Classicals and Diminishing Returns
9.1.3 The Role of Immigration in the Classical Model
9.1.4 Was the Classical Model a Failure?
9.1.5 Forgetting the Classicals and Marx: The Neoclassical School
9.1.6 Keynes and the Harrod-Domar Model
9.2 The Solow Growth Model
9.2.1 A Graphic Representation of the Solow Model
9.2.2 Immigration Similarly Has No Long-Run Effects
9.2.3 How an Economy Achieves Permanent Growth
9.3 Immigration and Technological Progress: A First Examination
9.3.1 Immigration and Technological Progress
9.3.2 Joseph Schumpeter´s Theory of Creative Destruction
9.3.3 The Opportunity Costs of Innovation
9.3.4 The Gains from Innovation
9.4 Immigration in the Schumpeterian Model: A More General Discussion
9.4.1 Immigrants as an Innovative Resource
9.4.2 Immigrants, Population Size, and the Returns to Innovation
9.4.3 Immigrants and Technology Transfers
9.5 Growth Effects of Immigration in the Source Country
9.5.1 The Overall Growth Effect of Out-Migration
9.5.2 How Remittances Are Used in Source Countries
9.5.3 The Brain Drain Again
9.6 Summary and Tentative Observations
Appendix: An Alternative Mathematical Schumpeterian Model
Innovation and Profit
The Equilibrium Level of Entrepreneurial Activity
The Equilibrium Rate of Technological Progress
References
Chapter 10: Immigration and Economic Growth: More Fundamental Issues
10.1 Technology
10.1.1 A Broader Definition of Human Technology
10.1.2 The Diversity of Technological Change
10.1.3 The S-Curve of Technology Diffusion
10.1.4 Technological Change Is Not Always Technological Progress
10.1.5 Technological Change Is a Combinatorial Process
10.1.6 Technology Is a Nonrival Good
10.1.7 Paradigm Shifts
10.2 Immigration and the Agglomeration of Economic Activity
10.2.1 The Causes of Agglomeration
10.2.2 The Agglomeration of Innovative Activity
10.2.3 The Changing Patterns of Economic Activity
10.3 Immigration and the Social and Natural Environments
10.3.1 Nature as a Source of Diminishing Returns
10.3.2 The Natural Environment
10.3.3 An Ecological Solow Model
10.3.4 Adding a Third Sector: Human Society
10.3.5 Bourdieu´s Forms of Capital
10.3.6 Modeling the Social Sector
10.4 Institutions and Social Capital
10.4.1 The Study of Institutions
10.4.2 Conflicts Between Formal and Informal Institutions
10.5 Chapter Conclusions and Some Further Thoughts on the Solow Model
References
Part II: Immigration Issues and Cases
Chapter 11: Temporary Immigration, Involuntary Immigration, and Other Variations on the Standard Model
Chapter Overview
11.1 Return Immigration
11.1.1 Return Immigration as a Response to Changing Circumstances
11.1.2 Correcting Mistakes in Judgement
11.1.3 Source Country Policies to Encourage Immigrants to Return
11.2 Temporary Immigration
11.2.1 The Multinational Corporation and Temporary Immigration
11.2.2 Temporary Immigration as a Destination Country Policy
11.2.3 The Diversity of Temporary Immigration
11.3 Analyzing Temporary Migration
11.3.1 A Simple Model: Culture Clash Versus Higher Income
11.3.2 Other Determinants of Temporary Immigration
11.3.3 The Role of International Trade
11.3.4 Further Issues Related to Temporary Immigration
11.3.5 Temporary Immigration as a Form of Labor Market Discrimination
11.3.6 Growth Implications of Temporary Immigration
11.3.7 Temporary Immigration and the Ageing Problem
11.4 Asylum Seekers and Refugees
11.4.1 Refugees
11.4.2 The UNHCR
11.4.3 Asylum Seekers
11.5 Involuntary Immigration
11.5.1 A Model of International Slavery
11.5.2 Other Oppressive Forms of Immigration
11.6 Summary and Conclusions
References
Chapter 12: Unauthorized Immigration
12.1 Introduction
12.2 Estimating Unauthorized Immigration
12.2.1 The Residual Method
12.2.2 Other Methods for Estimating Unauthorized Immigration
12.3 What Do the Estimates Tell Us?
12.4 Some Characteristics of Unauthorized Immigrants
12.5 The Economic Analysis of Unauthorized Immigration
12.5.1 The Supply and Demand for Unauthorized Workers
12.5.2 Unauthorized Immigration as a Form of Labor Market Discrimination
12.5.3 Oppression of Unauthorized Workers
12.5.4 Discussion of the Labor Segmentation Hypothesis
12.5.5 Temporary Work Visas: Just a Variation on Illegality?
12.5.6 Unauthorized Immigration Can Be Deadly
12.6 The Fiscal Costs and Benefits of Unauthorized Immigration
12.7 Unauthorized Immigration: Policy Options
12.7.1 Border Controls
12.7.2 Employer Sanctions
12.8 Conclusions
References
Chapter 13: Hispanic Immigration to the USA
13.1 A Brief Description of Recent Hispanic Immigration to the USA
13.2 Assimilation
13.2.1 Hispanics´ Slow Assimilation
13.2.2 Further Reasons Why Hispanic Assimilation Is Slow
13.2.3 Is It All Just a Data Problem?
13.3 Geographic Diffusion
13.3.1 Networks and Herding
13.3.2 Toward the South and the Midwest
13.3.3 The Dispersal of Manufacturing Jobs and Immigrant Dispersal
13.4 Explaining Hispanic Immigration
13.4.1 The Welfare Effects on the Source Hispanic Countries
13.4.2 The Demand Effects of Hispanic Immigration
13.5 Future Hispanic Immigration
13.5.1 Will Hispanic Immigration Continue?
13.5.2 Temporary Immigration Programs
13.6 Conclusions
References
Part III: Immigration Policy: Introduction
The Goals of Immigration Policy
Classifying Immigration Policies
References
Chapter 14: Immigration Policy in the USA
Chapter Overview
14.1 Early Immigration Policy
14.1.1 The Borders Were Not Entirely Open
14.1.2 Assessing the Early Policies
14.2 The Latter Half of the Nineteenth Century
14.2.1 Religion and Immigration
14.2.2 Growing Opposition to Immigration Spurs New Legislation
14.2.3 The Chinese Exclusion Act
14.2.4 Controlling the Border
14.2.5 Immigration Remained Mostly Open
14.2.6 Assessing the Early Policies
14.3 The Shift in Policy in the Early Twentieth Century
14.3.1 The First General Restrictions of Immigration
14.3.2 The Post-World War I Shift in Policy
14.3.3 Immigration During the Great Depression
14.3.4 Immigration Policy During the War
14.4 Post World War II Immigration Policy
14.4.1 Policy Immediately After the War
14.4.2 A New Immigration Law in 1965
14.4.3 The Economic Effects of the 1965 Act
14.4.4 The Growth of Unauthorized Immigration
14.5 Recent USA Immigration Policy
14.5.1 IRCA
14.5.2 After IRCA
14.5.3 Summarizing Recent US Policy
14.6 Post 9/11 Immigration Policy
14.6.1 Reform of the Immigration Bureaucracy and Enforcement
14.6.2 Employment-Based Permanent Residency
14.6.3 Temporary Work Visas
14.6.4 Diversity Immigrant Visas
14.6.5 Immigration Reform Stalls in 2006 and 2007
14.7 Summary and Conclusions
References
Chapter 15: Immigration Policy in Canada
Chapter Overview
15.1 Overview of Immigration Policy in Canada
15.1.1 Immigration and Population Growth in Canada
15.1.2 The Early Years
15.1.3 Late Nineteenth Century Immigration
15.1.4 Summary of Nineteenth Century Canadian Immigration Policy
15.2 Canadian Immigration Policy in the Twentieth Century
15.2.1 The First Half of the Twentieth Century
15.2.2 After World War II
15.2.3 Comparing Immigration Legislation
15.3 Canada´s Immigration Policy Today
15.3.1 The 2002 Reform
15.3.2 The Canadian Point System
15.3.3 Should Policy Discriminate in Favor of Highly Educated Immigrants?
15.3.4 The Seven Questions in the Early Twenty-First Century
15.3.5 Immigrant Performance and Recent Shifts in Policy
15.4 Some Final Observations
References
Chapter 16: Immigration Policy in Europe
Chapter Overview
16.1 European Migration During the Colonial Era
16.1.1 Colonial Regimes and Immigration
16.1.2 The Nineteenth Century
16.1.3 The Emigration Life Cycle
16.1.4 European Emigration After World War I
16.2 The Post-World War II Period
16.2.1 Guest Workers
16.2.2 The Post-Soviet Era
16.2.3 Recent EU Immigration Policy
16.3 The Interesting Case of Ireland
16.4 Recent Immigration Policy in Spain
16.5 Can Immigration Solve Europe´s Demographic Burden?
16.6 Conclusions
References
Chapter 17: Conclusions and Final Observations
Chapter Overview
17.1 Immigration: A Fundamental Economic Phenomenon
17.2 We Must Think Outside Our Little Boxes
17.3 An Appeal to Holism
17.3.1 Defining Holism
17.3.2 The Economics of Immigration Must Embrace Holism
17.3.3 The Holistic Approach to the Study of Immigration: An Example
17.4 Developing International Institutions for an International Phenomenon
17.4.1 The Global Commission on International Migration
17.4.2 What Is the Optimal Flow of Immigrants?
17.4.3 Small Steps Towards Global Governance
17.5 Final Comment
References
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