Migration states and welfare states: Why is America different from Europe?
Assaf Razin, Efraim Sadka 01 September 2014
European migration exhibits a bias towards low-skilled workers, whereas the US attracts the majority of the world’s skilled migrants. At the same time, the welfare system in Europe is more generous than the one in the US. This column describes an analytical framework that can explain the existence of these differences. Whether a group (union) of member states competes or coordinates its policies has an impact on the skill composition of its migrants and the generosity of the welfare system.
European welfare and migration policies are strikingly different from states within the US. Over the last half century, Europe ended up with 85% of all unskilled migrants to developed countries, whereas the US retains its innovative edge by attracting 55% of the world-educated migrants.
Migration Welfare state and social Europe
migration, welfare generosity, EU, US, skilled migrants
New evidence on the durability of social norms
John Helliwell, Shun Wang, Jinwen Xu 12 March 2014
Social norms have been shown to have important effects on economic outcomes. This column discusses new evidence showing that social norms are deeply rooted in long-standing cultures, but do evolve in reaction to major changes. It draws on a fully global sample involving migrants in more than 130 countries, using seven waves of the Gallup World Poll.
Recent studies find that individuals’ social norms – as evidenced by their opinions and behaviour – can be transmitted from one generation to the next within the same cultural setting (Algan and Cahuc 2010, Bjørnskov 2012, Dohmen et al. 2012, Guiso et al. 2006, Rainer and Siedler 2009, Rice and Feldman 1997). Studies also find that the current environment – such as institutions – plays an important role in shaping an individual’s social norms (Dinesen 2012, Nannestad et al. 2014, Alesina and La Ferrara 2002, Bjørnskov 2007, Glaeser et al. 2000, Helliwell and Wang 2011, Kosfeld et al.
Frontiers of economic research Migration
institutions, immigration, social attitudes, trust, migration, Culture, social norms
Remittances and vulnerability in developing countries: Results from a new dataset on remittances from Italy
Giulia Bettin, Andrea F Presbitero, Nikola Spatafora 10 February 2014
Remittances are one of the most important financial flows to developing countries – more than three times the level of official development assistance. This column presents recent research on remittance flows from Italy. Their limited volatility and countercyclical behaviour with respect to macroeconomic conditions in the recipient country help mitigate developing countries’ vulnerability to external shocks. Better access to financial services for migrants can foster remittance flows.
Remittances from migrant workers currently represent one of the most important financial flows to developing countries. They can play an important role in pulling millions of families out of poverty. It is therefore critical to identify the key factors affecting remittances, as well as the barriers to these flows (Beck and Martinez Peria 2009 ). In particular, it is important to understand how remittances depend on macroeconomic conditions in the migrants’ host country and country of origin, and how they were affected by the global financial crisis.
Italy, migration, global financial crisis, financial development, Remittances
The fiscal effects of immigration to the UK
Christian Dustmann, Tommaso Frattini 13 November 2013
The immigration debate has focused on immigrants’ net fiscal impact – whether they receive more in welfare payments and other benefits than they pay back in taxes. This column summarises recent research showing that – contrary to popular belief – immigrants who arrived in the UK since 2000 have contributed far more in taxes than they have received in benefits. Compared with natives of the same age, gender, and education level, recent immigrants are 21% less likely to receive benefits.
The impact of immigration on the tax and welfare system and the net fiscal consequences is perhaps the single most prominent economic issue in the public debate over the pros and cons of immigration. Accordingly, it is the debate about the fiscal effects – and not so much the effects on wages – of immigration that is currently dominating the debate not only in the UK, but also in other countries (see Boeri 2010).
Migration Welfare state and social Europe
welfare state, immigration, migration, benefits, UK, fiscal burden
How the great recession affected unemployment of non-Western Immigrants in the Netherlands
Jan van Ours 06 October 2013
In absolute terms, the Great Recession affected the unemployment rate of non-Western immigrants more than that of native workers in the Netherlands. However, this merely reflects their generally weak labour-market position – job-finding rates are much lower for non-Western immigrants than they are for natives. There is little difference between the cyclical sensitivity of these two groups’ unemployment or job-finding rates. In relative terms, the labour-market position of non-Western immigrants is bad, but the Great Recession did not make it worse.
The labour-market position of immigrants in many European countries is weak – unemployment rates among immigrants are high, and employment rates are low (OECD 2011). There are various explanations for this. Immigrants often have lower educational attainment than natives, and fewer language skills. Furthermore, ethnic identity may be important.
Labour markets Migration
unemployment, migration, Netherlands, Great Recession
Social and economic effects of return migration to Egypt
Simone Bertoli, Francesca Marchetta 04 October 2013
Return migrants have major social and economic consequences for their countries of origin. This column uses Egyptian household-level data to analyse the effects of migrants returning from neighbouring Arab countries. Start-up firms by returnees are more likely to survive, and returnee families tend to have more children. These results imply that return migration may not be an unmitigated blessing for Egypt.
A number of demographic, social, and economic factors constitute 'irresistible forces' that are contributing to the rise of the scale of international migration (Pritchett, 2006). The economic literature has not yet fully explored the wise array of effects this phenomenon can have on migrants’ countries of origin. When migration is predominantly temporary in nature, returnees represent a natural focal point of the analysis, as moving across borders can reshape the behaviour and the choices made by the migrants once they return home.
entrepreneurship, fertility, migration
Migration and wage effects of taxing top earners: Evidence from the foreigners' tax scheme in Denmark
Henrik Kleven, Camille Landais, Emmanuel Saez, Esben Schultz 17 September 2013
How responsive is international migration by high-skilled workers to tax differentials across countries? This column provides evidence from Denmark suggesting that a preferential scheme was highly successful in attracting rich foreigners. It warns that, absent international tax coordination, preferential tax schemes to high-income foreigners could substantially weaken tax progressivity at the top of the distribution.
Tax-induced international mobility of talent is a controversial public-policy issue, especially when tax rates differ substantially across countries and migration barriers are low as in the case of the EU. High top-tax rates may induce top earners to migrate to countries where the tax burden is lower, thereby limiting the redistributive power of governments and potentially creating harmful tax competition.
EU, tax competition, migration
The global race for inventors
Carsten Fink, Ernest Miguelez, Julio Raffo 17 July 2013
Migration is a hot-button issue across the globe. This column summarises new evidence on the patterns of skilled-worker migration, focusing on the specific case of inventors. A novel data source that traces worldwide migration flows for inventors suggests that, excluding a few nuances, the economic incentives for general migration also seem to influence inventors’ migration decisions.
Many countries are currently debating and reforming their immigration policies. One prominent question in these discussions is how to attract skilled workers that can ease domestic skills shortages and foster innovation and entrepreneurship.
Migration Productivity and Innovation
patents, innovation, migration, inventors
Moving to Greenland in the face of global warming
Klaus Desmet, Esteban Rossi-Hansberg 16 January 2013
There are two ways to deal with climate change: mitigation and adaptation. This column argues that in order to adapt, we need to take another look at an age-old coping mechanism: migration. Indeed, if overall hotter temperatures lower productivity in hot regions but raise productivity in what are currently cooler regions, the negative economic effects of climate change are likely to stem from frictions preventing the movement of people and goods. Without these frictions, adapting to climate change becomes that much easier. Climate change policy ought to aim at alleviating mobility frictions.
If populations don’t move, global warming is likely to have disastrous consequences.
climate change, trade, migration