Destination Economy Research Articles

Does international mobility of high-skilled workers aggravate between-country inequality?

This paper analyzes the interaction of international migration of high-skilled labor and relative wage income between source and destination economies of expatriates. We develop an overlapping-generations model with increasing returns which suggests that international integration of the market for skilled labor aggravates between-country inequality by harming those which are source economies to begin with while benefiting host economies. The result is robust to allowing governments to optimally adjust productivity-enhancing investments which could potentially attenuate brain drain. Optimal public investment tends to decrease in response to higher emigration.

Transnational Criminal Law as a Governance Strategy in the Global Labour Market: Criminalizing Globalization from Below

This article examines the consequence of treating irregular labour migration as a criminal law issue, rather than one of trade or development. If States are increasingly committed to the free movement of goods and skilled workers, why is the movement of unskilled workers a crime? Adopting an economic analysis, it is clear that irregular migrants provide labour-receiving States with a pool of workers who are cheap to employ, easy to fire, and who are effectively unable or unwilling to invoke employment rights. That is, migrant workers can be a significant source of cheap and rightless labour. Furthermore, this may be viewed not as a market distortion but a highly regulated part of the ordinary functioning of destination economies. The economic benefits of irregular migrants result from their status: a status regulated and perpetuated by law. High-and medium-income States may become structurally dependent upon this externalized ghetto of low-cost foreign labour, thus profiting from irregular migration while denouncing it. This article argues that, if irregular migration economically benefits destination States and is driven both by lack of development in labour-sending States and migrants' opportunity to remit money home, then the answer must lie in expanded systems of regular labour migration closely linked to development policy. Policy approaches must consider not only a trade/migrant-labour nexus but a trade/migrant-labour/development nexus. The article concludes by advocating that a set of principles of sustainable return is in the self-interest of labour-receiving States and outlining the content and utility of such principles. While the article aims to provide a theoretical account in an outline form that is adaptable to a variety of situations, it uses the example of African irregular migration into Spain and Spanish/EU responses to illustrate the argument. © UNHCR [2010]. All rights reserved.

Immigration and the Macroeconomy

We analyze the dynamics of labor migration and the insurance role of remittances in a two-country, real business cycle framework. Emigration increases with the expected stream of future wage gains but is dampened by the sunk cost reflecting border enforcement. During booms in the destination economy, the scarcity of established immigrants lessens capital accumulation, labor productivity, and the native wage. The welfare gain from the inflow of unskilled labor increases with the complementarity between skilled and unskilled labor and the share of the skilled among native labor. The model matches the cyclical dynamics of the unskilled immigration from Mexico.

The political market for immigration restrictions: Model and test

A two-sector model of the destination economy is developed in order to determine the distributional effects of immigration. In one sector, native and immigrant workers are substitutes in production, while in the other they are complements. The two industries are assumed to draw immigrants from the same pool, whose size is exogenous to employers and set by politicians. A political market for an endogenous immigration quota arises as a consequence of the conflicting interests of the two native worker groups, as well as those of lobbying groups organized along non-labor market lines. A reduced form expression for the equilibrium quota is derived. The size of the quota is determined by the levels of product and labor demand in the two industries, lobbying costs of native workers, the degree of substitutability or complementarity in production between native and immigrant labor, the proportions in which the immigrant workforce is divided between the two industries, the wage elasticities of demand for native and immigrant labor, the influence of groups opposed to immigration on non-economic grounds, and the size of the immigrant population in the destination country. The model is tested using annual data on employment visas issued by US authorities. It is found that political pressure for tighter immigration controls is dominant during periods of economic expansion, while technological progress, a growing immigrant community and a larger share of immigrants from Europe lead to looser immigration restrictions.

Law, Technology, and Development: Policy Debates in the New Millennium

The growth of multinationals and foreign direct investment in the past twenty-five years has increased our understanding of interdependencies among developed and developing economies. The impact of foreign direct investment in developing countries is analyzed by studying technology transfer, trade linkages, the flow and regulation of capital and finance, organizational changes and employment shifts. In recent years, researchers have shown that the flow of investment from developed to developing countries is undertaken in search of lower input costs as well as in search of new knowledge. Debates over the positive versus negative effects of the spread of multinationals and globalization in both source and destination economies have been politicized in national elections. Many factors have influenced the processes that led to the expansion of multinational companies across the world. Law and regulation facilitated the spread on one hand, and again new laws and regulations came about to control the activities of multinationals and nation states as well. This special issue is a collection of papers that range from specific debates on how technology transfer should be accommodated between developed and developing countries (Davis 2005), to what sort of technology must be developed to address the real needs of development (Archibugi & Bizzarri 2005). Within this broad spectrum, the following topics are addressed: an analysis of the relationship between foreign ownership and export performance in India to show the importance of strategic control in positioning Indian firms in the global production network (Chhibber & Majumdar 2005); the importance of real property ownership in globalization (Malloy 2005); the evolving politics among the U.S., EU and tax havens in taxing the profits of multinational corporations and ultimately the location of their subsidiaries. These papers are followed by three specific studies on regulating science and technology in a globalizing world. The first paper is on the evolving nature of patenting software and its implications (Graham &

Acknowledgements

The growth of multinationals and foreign direct investment in the past twenty-five years has increased our understanding of interdependencies among developed and developing economies. The impact of foreign direct investment in developing countries is analyzed by studying technology transfer, trade linkages, the flow and regulation of capital and finance, organizational changes and employment shifts. In recent years, researchers have shown that the flow of investment from developed to developing countries is undertaken in search of lower input costs as well as in search of new knowledge. Debates over the positive versus negative effects of the spread of multinationals and globalization in both source and destination economies have been politicized in national elections. Many factors have influenced the processes that led to the expansion of multinational companies across the world. Law and regulation facilitated the spread on one hand, and again new laws and regulations came about to control the activities of multinationals and nation states as well. This special issue is a collection of papers that range from specific debates on how technology transfer should be accommodated between developed and developing countries (Davis 2005), to what sort of technology must be developed to address the real needs of development (Archibugi & Bizzarri 2005). Within this broad spectrum, the following topics are addressed: an analysis of the relationship between foreign ownership and export performance in India to show the importance of strategic control in positioning Indian firms in the global production network (Chhibber & Majumdar 2005); the importance of real property ownership in globalization (Malloy 2005); the evolving politics among the U.S., EU and tax havens in taxing the profits of multinational corporations and ultimately the location of their subsidiaries. These papers are followed by three specific studies on regulating science and technology in a globalizing world. The first paper is on the evolving nature of patenting software and its implications (Graham &

Who is Against Immigration? A Cross-Country Investigation of Individual Attitudes Toward Immigrants

This paper empirically analyzes both economic and non-economic determinants of attitudes toward immigrants, within and across countries. The two individual-level survey data sets used, covering a wide range of developed and developing countries, make it possible to test for interactive effects between individual characteristics and country-level attributes. The paper identifies and investigates a strong empirical regularity concerning the relationship between individual skill and attitudes toward immigrants. I find that individuals with higher levels of skill are more likely to be pro-immigration in high per capita GDP countries and less likely in low per capita GDP countries. Additional results, based on a smaller sample of countries, suggest a labor-market explanation for this cross-country pattern. The variation across countries in the correlation between skill and preferences appears to be related to differences in the skill composition of natives relative to immigrants across destination economies. This finding is consistent with the predictions of the Heckscher-Ohlin model, in the absence of factor-price-insensitivity, and of the factor-proportions-analysis model. Finally, non-economic variables also appear to be correlated with immigration attitudes but they do not seem to alter significantly the results on the economic explanations.

Migration of Entrepreneurs from Hong Kong: Background, Trendsand Impacts

ABSTRACTThis paper critically examines the movement of entrepreneurs from Hong Kong within the context of whether Chinese culture predisposes them to become entrepreneurs: that the type of business relations and networks that the Chinese employ is in some way distinct from those of other groups because of Confucianism and unique ‘Asian values’. This interpretation is found severely wanting. Entrepreneurs are seen to be but one type of migrant from China and Hong Kong, and there are significant differences within Chinese migrant groups. We need to move away from vague cultural explanations to consider the context in which migrant groups find themselves before a satisfactory analytical framework for ethnic entrepreneurship can be constructed. The case of entrepreneurs moving to Canada is taken to illustrate recent policy changes and the impact of entrepreneurs on destination economies.

Immigrant Incorporation in the Garment Industry of Los Angeles

Stressing the network's facilitation of immigrants’ searches for jobs and housing, migration network theory has conceptually overlooked the manner in which immigrants’ social networks also expand the supply of jobs and housing in target destinations by means of the ethnic economy. An expanded migration network theory takes into account the ethnic economy's role in creating new resources in the destination economy. However, the power of this objection wanes in the context of working-class immigrations that generate few entrepreneurs. Introduced here, the concept of immigrant economy responds to this contingency. Unlike ethnic economies, in which co-ethnics hire co-ethnics, immigrant economies arise when immigrants hire non-co-ethnic fellow immigrants. This situation usually arises when very entrepreneurial immigrant groups coexist in a labor market with working-class immigrant groups that generate few entrepreneurs of their own. Using evidence from the garment industry of Los Angeles, this paper estimates that only a third of immigrant employees found their jobs in a conventional ethnic economy. Half owed their employment to the immigrant economy in which, for the most part, Asian entrepreneurs employed Latino workers.

Hong Kong's Response to the Indochinese Influx, 1975-93

The changing nature of the population flows from Vietnam to Hong Kong between 1975 and mid-1993 is examined in this article. Hong Kong's population is largely a product of refugee movements from China. Over the period under discussion, official policy toward all arrivals, whether from China or from Vietnam, became much more restrictive. The first wave of Vietnamese to Hong Kong mostly consisted of ethnic Chinese. These were relatively quickly recognized as refugees and resettled. The later waves of ethnic Vietnamese have been held in closed camps; those arriving after 1988 have been subject to screening to determine their refugee status. Those screened out are repatriated either voluntarily or forcibly to Vietnam. The outflows from Vietnam can be fully understood only after a comprehensive analysis of the nature of the origin and destination economies and societies. An economic dimension is usually present in supposedly political flows.

The impact of immigration on the human capital of natives.

"Implications of the quantity (number) and quality (skill) of immigration on the destination economy are analyzed, including impacts on value added, wages, quasi rents, rates of return, and the skill distribution of the native labor force. Quantity-quality trade-offs are considered for both immigrant and native workers. Medium- and long-run labor-supply responses by natives to immigrant-induced changes in wage rates are shown to have second-order effects which subtantively affect the impacts of immigrants. The impact of immigration policy depends on the quality as well as quantity of immigrants, the time horizon, and the speed of factor market adjustment."