Read more in:

Michele Tuccio, Jackline Wahba and Bachir Hamdouch: “International migration as a driver of political and social change: evidence from Morocco”
Journal of Population Economics, online, issue forthcoming.

Journal Website. Download PDF of article for free – OPEN ACCESS

GLO Fellows Michele Tuccio, Jackline Wahba and Bachir Hamdouch

Author Abstract: This paper focuses on the impact of international migration on the transfer of political and social norms. Exploiting recent and unique data on Morocco, this paper explores whether households with return and current migrants bear different political preferences and behaviors than non-migrant families. Once controlling for the double selection into emigration and return migration, the findings suggest that having a returnee in the household increases the demand for political and social change. This result is driven by returnees mostly from Western European countries, who were exposed to more democratic norms in the destination. However, we find a negative impact of having a current migrant on the willingness of the left-behind households to change. This result is driven by migrants to non-Western countries, where the quality of political and social institutions is lower. Our results are robust to also controlling for destination selectivity.

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Read more in:

Claudia Lumpe: “Public beliefs in social mobility and high-skilled migration”
Journal of Population Economics, Vol. 32 (2019), Issue 3, pp. 981–1008.

Journal Website Issue. Paper Access.

GLO Fellow Claudia Lumpe

Author Abstract: This paper investigates how beliefs of the destination country’s population in social mobility may influence the location choice of high-skilled migrants. We pool macro data from the IAB brain-drain dataset with population survey data from the ISSP for the period 1987–2010 to identify the effect of public beliefs in social mobility on the share of high-skilled immigrants (stocks) in the main OECD immigration countries. The empirical results suggest that countries with higher “American Dream” beliefs, i.e., with stronger beliefs that climbing the social ladder can be realized by own hard work, attracted a higher proportion of high-skilled immigrants over time. This pattern even holds against the fact that existing social mobility in these countries is relatively lower.

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Read more in:

Irene Ferrari: “The nativity wealth gap in Europe: a matching approach “
Journal of Population Economics, online, issue forthcoming.

Journal Website. Download PDF of article for free – OPEN ACCESS

GLO Fellow Irene Ferrari

Author Abstract: This study uses a matching method to provide an estimate of the nativity wealth gap among older households in Europe. This approach does not require imposing any functional form on wealth and avoids validity-out-of-the-support assumptions; furthermore, it allows estimation not only of the mean of the wealth gap but also of its distribution for the common-support sub-population. The results show that on average there is a positive and significant wealth gap between natives and migrants. However, the average gap may be misleading as the distribution of the gap reveals that immigrant households in the upper part of the wealth distribution are better off, and those in the lower part of the wealth distribution are worse off, than comparable native households. A heterogeneity analysis shows the importance of origin, age at migration, and citizenship status in reducing the gap. Indeed, households who migrated within Europe, those who moved at younger ages rather than as adults, and those who are citizens of the destination country display a wealth gap that is consistently smaller over the entire distribution.

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GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers). Complete list of all GLO DPs downloadable for free.

GLO Discussion Paper of the Month: January

305 The Deterrent Effect of an Anti-Minaret Vote on Foreigners’ Location Choices – Download PDF
by Slotwinski, Michaela & Stutzer, Alois

Abstract: In a national ballot in 2009, Swiss citizens surprisingly approved an amendment to the Swiss constitution to ban the further construction of minarets. The ballot outcome manifested reservations and anti-immigrant attitudes in regions of Switzerland which had previously been hidden. We exploit this fact as a natural experiment to identify the causal effect of negative attitudes towards immigrants on foreigners’ location choices and thus indirectly on their utility. Based on a regression discontinuity design with unknown discontinuity points and administrative data on the population of foreigners, we find that the probability of their moving to a municipality which unexpectedly expressed stronger reservations decreases initially by about 40 percent. The effect is accompanied by a drop of housing prices in these municipalities and levels off over a period of about 5 months. Moreover, foreigners in high-skill occupations react relatively more strongly highlighting a tension when countries try to attract well-educated professionals from abroad. 

GLO Discussion Papers of January 2019

308 Technological Unemployment Revisited: Automation in a Search and Matching Framework – Download PDF
by Cords, Dario & Prettner, Klaus

307 Gender, culture and STEM: Counter-intuitive patterns in Arab society– Download PDF
by Friedman-Sokuler, Naomi & Justman, Moshe

306 Time preferences and political regimes: Evidence from reunified Germany– Download PDF
by Friehe, Tim & Pannenberg, Markus

305 The Deterrent Effect of an Anti-Minaret Vote on Foreigners’ Location Choices – Download PDF
by Slotwinski, Michaela & Stutzer, Alois

304 Tropical Storms and Mortality under Climate Change – Download PDF
by Pugatch, Todd

303 The Post-Crisis Phillips Curve: A New Empirical Relationship between Wage and Inflation  – Download PDF
by Voinea, Liviu

302 Marshallian vs Jacobs effects: which one is stronger? Evidence for Russia unemployment dynamics  – Download PDF
by Demidova, Olga & Kolyagina, Alena & Pastore, Francesco

301 The World at the Crossroad. Demographic Polarization and Mass Migration. Global threat or global opportunity  – Download PDF
by Bruni, Michele

300 The Belt and Road Initiative. Demographic trends, labour markets and welfare systems of member countries  – Download PDF
by Bruni, Michele

299  The unprotecting effects of employment protection: the impact of the 2001 labor reform in Peru – Download PDF
by Jaramillo, Miguel

298  Measuring the Statistical Capacity of Nations  – Download PDF
by Cameron, Grant J. & Dang, Hai-Anh H. & Dinc, Mustafa & Foster, James & Lokshin, Michael M.

297  Inequality and Welfare Dynamics in the Russian Federation during 1994-2015  – Download PDF
by Dang, Hai-Anh H. & Lokshin, Michael M. & Abanokova, Kseniya & Bussolo, Maurizio

296  A Beveridge curve decomposition for Austria: what drives the unemployment rate?  – Download PDF
by Christl, Michael

295 Health, Cognition and Work Capacity Beyond the Age of 50   – Download PDF
by Vandenberghe, Vincent

GLO DP Team
Senior Editors: Matloob Piracha (University of Kent) & GLO; Klaus F. Zimmermann (UNU-MERIT, Maastricht University and Bonn University).
Managing Editor: Magdalena Ulceluse, University of Groningen. DP@glabor.org

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“Holzmann is a conservative economist of high academic competence and standing. He is an independent thinker, and it can only be of value for the European Central Bank when a pension expert sits in the central monetary committee. An important future challenge for monetary and fiscal policies will be the large forthcoming burden of pensions for European societies”, Zimmermann said.

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Some people argue that the Brexit situation and the uncertainty will also harm the countries on the European continent. Martin Kahanec has written many scientific contributions and policy briefs on the European integration and the role of migration in particular from Eastern Europe. His early insights matter a lot at this stage of the Brexit process.

Martin Kahanec is a Professor and Head of the School of Public Policy at the Central European University in Budapest. He is Founder and Scientific Director of CELSI, Bratislava, a Chairperson of the Slovak Economic Association and Fellow of the Global Labor Organization (GLO).

The Interview

KFZ: Are you surprised about the large rejection of the Brexit deal?

Martin Kahanec: The landslide is perhaps a bit surprising, but there are several well-defined groups who had every reason to vote against the Brexit deal. One group are those, mainly from the Labor camp, who oppose May, or saw a “nay” as the only way to have a second referendum, or both. Among those who wish for a second referendum are probably a good number of conservatives, too. The other group is composed of those, primarily conservatives, who consider it a bad deal, not protecting the UK’s interests adequately. And then there is the DUP, who oppose the Northern Ireland backstop. It is hard to imagine a deal that would be accepted by some majority in the House of Commons and by the 27 EU member states as well, and with May investing very little in cross-party consensus building, the “nay” result was to be expected.

KFZ: What do you expect to happen now, general elections, a new referendum, a cold Brexit, or else?

Martin Kahanec: I have no crystal ball. I hope for a new referendum, resulting in the UK remaining in the EU. With Corbyn as a staunch Brexiter at the helm of Labor, one important question is what is needed for him to reflect on the preferences of the majority of his party’s constituency, and turn Labor determinedly in favor of Remain. Whereas postponing Brexit by several months can give some time for what I see as forces of reason to take their effects, I am also afraid that a prolonged agony may further deepen the cleavages and sharpen the tensions in the British society, furthering its polarization, and leaving little space for consensus building. But a cross-party consensus, and strong leadership of the Speaker of the House, are very much needed to avoid a crash-Brexit and explore the options for a new deal or a second, possibly binding referendum.

KFZ: What are the consequences for Europe?

Martin Kahanec: On the one hand, the rejection of the deal is a lifeline for Remain hopes. On the other hand, the ultimate outcome is as unclear as ever. This uncertainty is very unhelpful for the European economy. If the UK leaves the EU, the economic consequences for the EU (and even more so for the UK) will be very much on the negative side. In particular, it will be a major challenge for the eastern member states of the EU. Hundreds of thousands of eastern Europeans work in the UK. Some of them will consider returning to their home countries. As they are primarily young, and have acquired many hard and soft skills in the UK, their return would help the labor markets and public budgets back home. However, they would likely be less productive in their home countries than in the UK, and so their incomes would go down. This and the reduced interstate mobility would also decrease productivity in Europe and hurt its capacity to absorb economic shocks. An abrupt return of large numbers of workers to the sending countries could exceed the capacity of their labor markets, social security and health care systems, and social services to absorb them, creating temporary congestion and resulting in tensions between returnees and their compatriots. The UK will also be hurt: it will lose many thousands of skilled, hard working men and women and talented students from eastern Europe. The UK is also a major trading partner and source of investment for the eastern member states. Brexit would significantly reduce the gains from that trade and investment for both parties. 

Note: KFZ here is Klaus F. Zimmermann, UNU-MERIT, Maastricht University and President of the Global Labor Organization (GLO).

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The Lead Article is about:
Migration as an adjustment mechanism in the crisis? A comparison of Europe and the United States 2006–2016

Authors: Julia Jauer, Thomas Liebig, John P. Martin, Patrick A. Puhani

Abstract

” We estimate whether migration can be an equilibrating force in the labour market by comparing pre- and post-crisis migration movements at the regional level in both Europe and the United States, and their association with asymmetric labour market shocks. Based on fixed-effects regressions using regional panel data, we find that Europe’s migratory response to unemployment shocks was almost identical to that recorded in the United States after the crisis. Our estimates suggest that, if all measured population changes in Europe were due to migration for employment purposes—i.e. an upper-bound estimate—up to about a quarter of the asymmetric labour market shock would be absorbed by migration within a year. However, in Europe and especially in the Eurozone, the reaction to a very large extent stems from migration of recent EU accession country citizens as well as of third-country nationals.”

Read also open access for a short period:

Yoo-Mi Chin & Nicholas Wilson, Disease risk and fertility: evidence from the HIV/AIDS pandemic, Journal of Population Economics, 31 (2018), 429–451.

Kuznets Prize Winner 2019.
The paper is freely downloadable for a short period. The Award Study shows that a rise in the disease risk increases the total fertility rate and the number of surviving children, a finding which has important policy implications.

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The article in the new issue

Immigration restrictions and second-generation cultural assimilation: theory and quasi-experimental evidence

By Fausto Galli, Giuseppe Russo; pp. 23-51

Abstract

“We study the effects of immigration restrictions on the cultural assimilation of second-generation migrants. In our theoretical model, when mobility is free, individuals with a stronger taste for their native culture migrate temporarily. When immigration is restricted, however, these individuals are incentivized to relocate permanently. Permanent emigrants procreate in the destination country and convey their cultural traits to the second generation, who will therefore find assimilation harder. We test this prediction by using the 1973 immigration ban in Germany (Anwerbestopp) as a quasi-experiment. Since the ban only concerned immigrants from countries outside the European Economic Community, they act as a treatment group. According to our estimates, the Anwerbestopp has reduced the cultural assimilation of the second generation. This result demonstrated robustness to several checks. We conclude that restrictive immigration policies may have the unintended consequence of delaying the intergenerational process of cultural assimilation. “

Read further open access for a short period:

Yoo-Mi Chin & Nicholas Wilson, Disease risk and fertility: evidence from the HIV/AIDS pandemic, Journal of Population Economics, 31 (2018), 429–451.

Kuznets Prize Winner 2019.
The paper is freely downloadable for a short period. The Award Study shows that a rise in the disease risk increases the total fertility rate and the number of surviving children, a finding which has important policy implications.

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In a new paper with Linguère Mously Mbaye we review the effects of natural disasters on human mobility or migration. Although there is an increase of natural disasters and migration recently and hence more evidence to observe, the relationship remains complex. While some authors find that disasters increase migration, others show that they have only a marginal or no effect or are even negative. Human mobility appears to be an insurance mechanism against environmental shocks and there are different transmission channels which can explain the relationship between natural disasters and migration. Moreover, migrants’ remittances help to decrease households’ vulnerability to shocks but also dampen their adverse effects. The paper further provides a discussion of policy implications and potential future research avenues.

Linguère Mously Mbaye & Klaus F. Zimmermann, 2016, Natural Disasters and Human Mobility. For the full paper see ZEF Working Paper or UNU-MERIT Working Paper. Forthcoming: International Review of Environmental and Resource Economics

Further recent research papers.