Immigrant Stock Research Articles

Does the internet defy the law of gravity?

We show that gravity holds in the case of digital goods consumed over the Internet that have no trading costs. Therefore trade costs cannot fully account for the effects of distance on trade. In particular, we show that Americans are more likely to visit websites from nearby countries, even controlling for language, income, immigrant stock, etc. Furthermore, we show that this effect only holds for taste-dependent digital products, such as music, games, and pornography. For these, a 1% increase in physical distance reduces website visits by 3.25%. For non-taste-dependent products, such as software, distance has no statistical effect.

How to partly bounce back the struggle against illegal immigration to the source countries

Recent models on the dynamics of immigration control claim that tightening internal borders may trigger the formation of networks supporting clandestine foreign workers. This may, in turn, increase the overall stock of illegal immigrants in the economy. One possible solution to this threatening situation might be to partly bounce back the struggle against illegal immigration to the source countries. This paper suggests that under certain conditions, the receiving country should direct some of the resources earmarked for coping with the problem of the illegal flow of workers to financially supporting the source countries, allowing them to compete among themselves for such aid. This support would be allocated according to the relative effort made by each source country in curbing illegal immigration, thereby motivating them to moderate the phenomenon. The model is also applicable to other fields of negative externalities, such as the smuggling of drugs and weapons, terrorism, and pollution.

A Spatial Economic Perspective on Language Acquisition: Segregation, Networking, and Assimilation of Immigrants

Immigration and multiculturalism are at the heart of modern Western societies. The issue of language acquisition of immigrants is intrinsically linked to immigration. We formally link language acquisition of immigrants to the relative size of the immigrant stock, employing a microeconomic trading framework. Our model allows for spatial interaction going beyond the immigrant's area of residence, and explicitly incorporates spatial segregation. In addition, behavioral differences of immigrants with respect to their level of assimilation into the host country, as well as differences in networking within their own ethnic community, are accounted for. We test our model for four non-Western immigrant groups in the Netherlands at two different spatial scale levels. The empirical results reveal that there is only ambiguous support for the inverse relationship between size of the immigrant community and language acquisition or language proficiency in The Netherlands. We find instead that there is strong support for language acquisition and understanding being positively influenced by assimilation to the host country's culture.

Does Immigration Help to Explain Intra-Industry Trade? Evidence for Spain

This paper argues and provides evidence that the stock of immigrants in a country has a positive effect on the share of its bilateral intra-industry trade (IIT). The paper links the literatures about immigration and trade and about IIT determinants. The key is that immigration contributes to trade transaction costs reduction and this would benefit the trade in differentiated products, i.e. IIT, more than the trade in homogeneous products, i.e. inter-industry trade. We test this hypothesis using Spanish data and departing from the models developed by Helpman. Results are robust to different IIT measures, estimation methods and specifications.

"Linguistic Distance" as a Determinant of Bilateral Trade

We introduce a measure of language difficulty called linguistic distance into a modified gravity model to determine whether the fact that a language is further away from English affects the level of trade. Our sample of 36 non-English speaking countries includes Japan and South Korea, which we argue are special cases due to World War II, the Korean War, and subsequent close political and economic ties with the United States. Presence of a stock of immigrants in the home country has been shown to enhance trade, both exports and imports, with the country of origin. Controlling for network and information attributes provided by the presence of a stock of immigrants, the special relationship with Japan and Korea, and the standard gravity model variables, we find that the further a countryi?½s primary language is from English, the lower trade will be between the United States and that country. These results hold for aggregate exports and imports as well as for exports and imports of consumer manufactures and producer manufactures.

“Linguistic Distance” as a Determinant of Bilateral Trade

We introduce a measure of language difficulty called “linguistic distance” into a modified gravity model to determine whether a language being further away from English affects the level of trade. Our sample of 36 non‐English‐speaking countries includes Japan and South Korea, which we argue are special cases because of World War II, the Korean War, and subsequent close political and economic ties with the United States. Presence of a stock of immigrants in the home country has been shown to enhance trade with the country of origin. Controlling for immigrant network and information attributes, the special relationship with Japan and Korea, and the standard gravity model variables, we find that trade will be less between the United States and a country the further that country's language is from English. These results hold for aggregate exports and imports and for exports and imports of consumer and producer manufactures.

Immigration and International Trade: A Semiparametric Empirical Investigation

This paper examines the effect of immigration on the US trade flows. The model hypothesizes that immigration facilitates international trade with home countries by lowering transaction costs. Immigrants also demand products from their country of origin and thus stimulate trade. Using a panel data set we estimate a dynamic semiparametric fixed-effect model. The immigrant stock, a proxy for transaction costs, enters the model non-parametrically, whereas other variables enter the model log-linearly, as implied by the gravity model of international trade. To estimate this semiparametric model, we develop a new instrumental variable estimator with desirable asymptotic properties. The results indicate that the immigration effect on imports is positive for both finished and intermediate goods, but the effect on exports is positive only for finished goods. The findings supports the hypothesis that for finished goods where country specific information is crucial for trading, immigrants have a pro trade effect for both US imports and US exports. This pro trade effect of the information and knowledge carried by the immigrants is not observed for the US exports in the intermediate goods. Immigrants also have a strong demand effect both for the consumer and intermediate imports.

Comments

Joseph Tracy: This paper adds to our understanding of the economic impact of immigrants on native residents in U.S. metropolitan areas. There is a growing empirical literature in labor economics that has examined the immigrant impact on wages of native workers. However, to understand the full economic effect of immigration on domestic households it is important to examine the impact in the housing market. And measuring immigrant impacts on wages and rents should provide a more complete test of the prevailing theoretical arguments in the literature. As discussed in Borjas, Freeman, and Katz, the wage impacts of immigrants on domestic workers tend to be small when measured at the locality and only begin to emerge as significant as the researcher expands the geographic scope of the analysis. An explanation for this finding is that immigrants into a city tend to displace native workers of similar skills.31 That is, an influx of immigrants into a city does not necessarily lead to an equivalent outward shift in the local labor supply since native workers affected may choose to migrate to another locality. The displacement hypothesis would also imply little impact on rents by an influx of immigrants into a city. For the same reason that an influx of immigrants into a city need not lead to an outward shift in the local labor supply, it may not lead to an outward shift in local housing demand. A finding of no significant immigrant impact on rents, when combined with the lack of any significant local wage impacts documented in the labor literature, would provide additional support to the displacement [End Page 188] hypothesis. However, a finding of a significant positive immigrant impact on rents would present a challenge to the displacement hypothesis. In a recent paper, Saiz finds that on average a 1 percent inflow of immigrants into a city is associated with a 1 percent increase in rents.32 Greulich, Quigley, and Raphael (hereafter GQR), in contrast, find no significant impact of the share of immigrants in a city on the median rent-to-income ratio (table 5). Both studies look at census data and arrive at different answers.33 How do we reconcile the two sets of empirical findings? Although it is beyond the scope of this comment to answer this question, I would like to raise a few issues that may point to a reconciliation of the results. Note first that the immigrant control measures differ between Saiz and GQR. Saiz uses the change in the number of immigrants living in a city over a period of time relative to the city population at the outset of that time interval (Iit - Iit-1)/Pit, where Iit is the number of immigrants in city i in year t, and Pitis the population of city i in year t. In contrast, GQR use the immigrant population share in the city or the change in the immigrant population share: Iit/Pit or (Iit/Pit) - (Iit-1/Pit-1). Which immigrant control variable is more appropriate? The answer may depend on the underlying theoretical model that the researcher is trying to test. Saiz is interested in testing whether a presumed outward shift in the demand for housing resulting from an inflow of immigrants affects rents paid by domestic households. He explicitly has a demand and supply of housing framework in mind and presents a formal model along these lines. Seeing the net change in the stock of immigrants into a city as a fraction of the city population would seem to be an appropriate control variable to measure shifts in the immigrant demand for housing. GQR do not discuss any theoretical framework in their paper. I believe, though, they also have in mind a model of the demand and supply of housing. I would argue, however, that the GQR immigrant control variable—the immigrant share—may be more appropriate for a quality-of-life (QOL) model.34 Suppose...

Regularising undocumented immigrants in Greece: Procedures and effects

This article examines the administrative procedures and results of the two legalisations in Greece in 1998 and 2001. Although the massive inflow of foreign immigrants had started in the late 1980s, the number of foreigners granted residence and work permits was restricted, causing a large stock of undocumented immigrants and creating the mentality that these economic immigrants are a new source of low-cost unregistered labour. Following the two legalisations, an increasing number of foreigners have progressed towards integration. Little has changed, however, in the other main aspects of immigration to Greece: not all undocumented immigrants have applied for legalisation; for various reasons many do not renew their green card when it expires; new or previously expelled migrants flock in, attracted by the demand for their flexible labour and facilitated by the large underground economy; around 230,000 expulsions continue to take place annually; and there is no indication as to how things are likely to develop after the new extension given to all permits until 30 June 2003. Under the present conditions of high unemployment, increasing economic uncertainty and political tension in the country, a third legalisation within a short time-frame may cause serious social reactions. The main challenge to migration policy now is how to effectively control migrant inflows and prevent legal immigrants, who also help to redress the serious demographic imbalances in Greece, from lapsing into illegality.

Prospects for international migration: Globalization and its discontents

The paper challenges the view that the late twentieth century is the ‘age of migration’. For developing countries, flows of out-migrants are small compared with population growth, although in developed countries the stock of immigrants increased in proportion to the total population between 1965 and 1990. Despite the importance of refugee movement, the main force for international migration is economic. Why do not more people migrate (internally and internationally) to take advantage of potential economic gains? For international migration, one deterrent is institutional barriers against uncontrolled immigration. Different interest groups stand to gain or lose from increased migration. The income-enhancing effects of unhindered international labour migration, measured jointly for sending and receiving countries and by extension globally, should be very large. Even partial liberalization of immigration to industrialized countries would serve developing countries well. In industrialized countries, however, there is concern about the effect of massive labour inflows on the ethnic, religious and cultural composition of the population and its social cohesion. In some countries, migration is leading to greater ethnic mingling; in others there is a recrudescence of nationalistic aspirations for independent statehood with ethnically homogeneous populations, or to preserve the advantages of economically successful subregions.

International Migration and Migration Policy in Denmark

Abstract: The paper gives an introduction to the persistent problems regarding labour market integration of Non-Western immigrants and refugees in Denmark. We describe changes in the flow of immigrants to Denmark and the derived changes in the composition of the stock of immigrants and descendants on national origin. Next, the paper describes Danish immigration policy from the guest worker stop in the 1970s and until the recent situation. The shift in the composition of immigrants has contributed to a problematic situation regarding labour market integration, characterized by low participation and high unemployment among non-OECD immigrants. We emphasize problems on the demand side of the labour market, i.e. a high minimum wage and discrimination to some extent, and on the supply side due to weak or counterproductive financial incentives. * CIM, CLS, IZA and Department of Economics, University of Aarhus, Universitetsparken, 8000 Aarhus C, Denmark, email: pjp@cls.dk ** CIM, CLS, IZA and Department of Economics, Aarhus School of Business, Fuglesangs Alle 20, Aarhus V, Denmark, email: nina@asb.dk

Eastern Enlargement and Eu-Labour Markets: Perceptions, Challenges and Opportunities

This paper summarizes the key findings of a recent study on the impact of Eastern Enlargement of the European Union (EU) on labor markets in the current Member States. The study focuses on three main channels, along which enlargement may affect labor markets in the EU, namely i) trade, ii) foreign direct investment, and iii) migration. A main conclusion of the study is that trade and capital movements are very unlikely to lead to an equalization of factor prices. Thus, strong economic incentives to migration are bound to be present well beyond the date of accession. We estimate the migration potential associated with Eastern enlargement drawing on a time series model of immigration to Germany, which allows to estimate the long-term equilibrium migration potential, as well as the speed of adjustment at which the potential takes place. Our findings suggest that the long-run stock of immigrants from the CEECs-10 in the EU will increase from 0.85 in 1998 to a peak of 3.9 million persons which is expected to be reached around 30 years after the liberalization of labor movements. Net immigration inflows in the EU are bound to increase immediately reaching a maximum of about 335,000 individuals per year, and subsequently decline to a modest 100,000 to 150,000 people per annum. Around 35% of the migrants are expected to be workers. Microeconometric exercises carried out in the context of the study indicate that such an influx of migrants will have only a moderate impact on wages and employment even in the two most affected countries, Austria and Germany. Although we are dealing with relatively small numbers, they may have an impact on wages and employment in some neighboring regions of Austria and Germany, where immigration from the CEECs-10 is concentrated. In the final section of the paper, we argue for keeping actual migration flows from CEECs-10 under control for a transitional period. Although the chapter in the accession negotiations on the free movement of labor has been already opened, a joint position of the present EU members regarding this fundamental issue is still missing. European leaders will soon have to come to terms with this issue.

First- and Second-Generation Migrants in Germany - What Do We Know and What Do People Think?

This paper provides a snapshot of the stock of immigrants in Germany using the 1995 wave of the Mikrozensus, with a particular emphasis on distinguishing first- and second- generation migrants. On the basis of this portrait, we draw attention to the empirically most relevant groups of immigrants and review the received literature on economic migration research in the three principal avenues of migration research. The aspect which we concentrate on in our empirical application, the welfare dependence of immigrants, is a matter of intense debate among economists and policy makers. We contrast the very moderate actual public transfer payment dependence of migrants to Germany with the perception of migrants dependence on public assistance by Germans from various population strata.

The Pro-Trade Effect of Immigration on American Exports During the Late Nineteenth and Early Twentieth Centuries

The belief that immigrants generate beneficial externalities in their host countries, specifically in the form of an increased opportunity and ability of firms to expand their foreign trade, has recently been challenged by George Borjas in Heaven's Door (1999, p. 97) as having no empirical support. Borjas' assertion ignores several recent papers that provide precisely that evidence of a powerful pro-trade effect of international migration. Here we extend that body of evidence by looking to history. We show that immigration, primarily from Europe between 1870 and 1910, had an important pro-trade effect on American exports. Our data set spans the exports of 44 commodities to 17 countries observed at 5 year intervals. We use a modified gravity model to examine the migrant stock-export relationship and find that United States exports to a country were positively related to the size of the migrant stock of immigrants from that country. The estimated strength of the effect varied across Old Europe, New Europe, and non-Europe groupings of the trading partner countries. Exports were also found to have been greater to English-speaking countries, and to countries with per capita incomes similar to the United States. This relative per capita income effect became stronger during the latter part of the period, whereas the migrant stock effect diminished after 1885.

Migration and the Employment and Wages of Native and Immigrant Workers

This article assesses the association between migration (both international and internal) and the employment status and earnings of young non-college-educated native White, Black, Hispanic, Asian, and immigrant white-collar and blue-collar workers in the United States during the decade from 1980 to 1990. The authors present results that only partly support the claim that internal migrants and immigrants are substitutes for native workers. On one hand, the authors found that migration (flow) was not a major factor associated with the increased joblessness and decreased wages experienced by some native groups during the 1980s, particularly among blue-collar workers. On the other hand, the authors did find that changes in the foreign-born composition of an industrial sector (a measure of immigrant stock) were associated with increased joblessness of native workers and decreased joblessness of immigrant workers.

Estimating the effects of immigration in one city

This paper presents a new method of estimating the effects of immigration on the labor market that does not require variations in immigration across cities. With a two-stage CES model that aggregates immigrant groups by age cohorts and aggregates cohorts into effective labor, the econometric estimation and the interpretation of parameters are particularly straightforward. The paper uses data from Hong Kong to estimate the elasticities of complementarity associated with increased immigration. A simulation study indicates that a 40% increase in the stock of new immigrants will lower wages by no more than one percent.

Immigration, education, and the future of the california workforce

In the decades after the second world war, California's highly educated workforce was a central part of the booming California economy, especially in the 1950s and 1960s when large numbers of migrants arrived from the Middle West and the East Coast. Now in the last decade of the twentieth century there is evidence that California's educational advantage may be shifting. The overall levels of education in California's workforce are decreasing relatively, with real implications for the future human capital of California. The data show lower education levels in California and a reversal of previous patterns when California's workforce was more educated than the nation as a whole. The implications for the future of California as a cutting edge economy are less clear, but it is possible that increasingly, California will be competing with other states for the fast-growing and well-paying jobs in the high technology sector. The future of the California workforce will be closely bound up with the education of the immigrant stock already in California and with the continuing flows from Mexico and Central America.

Immigration Research in the United States

This paper presents and analyzes findings from the first National Survey of Immigration Scholars (NASIS), designed specifically to inquire into the social origins and research orientations of scholars who specialize in immigration studies and who are most responsible for producing our scholarly knowledge base. The NASIS sample consists of immigration scholars in a wide range of disciplines and at all stages in their careers. Unlike the nascent scholarship on immigration at the turn of the 19th century, the present era has seen many immigrants themselves become leading scholars of immigration in certain disciplines, and children, and especially grandchildren of immigrants are prominent immigration scholars in others. The finding that almost half of today's immigration scholars are themselves of immigrant stock, including the majority of the sociologists and more than a third of the anthropologists and historians, underscores the profound impact of immigration on the field itself. Simply put, immigration is producing many of the scholars who study it and who will tell its story.

Dynamics of immigration control

This paper examines the dynamic implications of border control policies and internal enforcement measures for the pattern of illegal immigration and the sectoral allocation of clandestine foreign workers. It is argued that efforts to control illegal immigration in sectors where they traditionally find employment may trigger the formation of networks supporting clandestine foreign workers in new locations and occupations where the probability of detection is relatively lower. The end result may be an increase in the overall stock of illegal immigrants residing in the economy.

The effect of immigration on the internal migration of the native-born population, 1981-1990

This study examines the impact of immigration on the labor market opportunities of the native-born population by looking through the window of migration. We use Current Population Survey data to analyze the one-year migration patterns of Anglos and Blacks and include the presence of recent immigrants in the origin and (potential) destination US states among the covariates. Our departure model employs a logit specification to predict outmigration (vs not) from the state during the year prior to the survey. Our arrival model uses a conditional logit discrete choice specification with sampling among the alternatives to predict destination state. The data are taken from the 1981, 1984, 1987, and 1990 Current Population Surveys. This work adds to other knowledge of the migratory response of workers and sheds light on theories of substitution and complementarity in labor markets. States with high levels of recent immigration are less likely to retain Anglo workers or receive new Anglo interstate migrants, but this apparent substitution effect is partially offset by the presence of long-term immigrant stock. Lower skilled Anglos are more susceptible to this substitution effect than those of higher skill level. In the black population, results are more complex. Lower skilled blacks are less attracted to high immigrant locations, but African-Americans of higher skill level in selected occupations and industries are predicted to be more likely to remain in or choose states with many recent immigrants.