Migration & Labor, GEOG1012, S1 2024 PDF

11/11/2024 Developing nations are hit hardest! “Outward capital flow” → links to Stiglitz arguments on “hot capital” & “casino capitalism” “Emergency finance” → lender of last resort Bilateral “swap lines” → links to roles to stabilize currencies. Swap lines provide liquidity in foreign currenc...

11/11/2024 Developing nations are hit hardest! “Outward capital flow” → links to Stiglitz arguments on “hot capital” & “casino capitalism” “Emergency finance” → lender of last resort Bilateral “swap lines” → links to roles to stabilize currencies. Swap lines provide liquidity in foreign currencies 1  11/11/2024 Migration & Labor Instructor: dr. Frank van der Wouden GEOG1012 – 1st semester 2024-2025 Why do we care? Migration is a key driver of globalization (and vice versa!) Has a distinct geography → local… and developing to developed 2  11/11/2024 Why do we care? Migration is a key driver of globalization (and vice versa!) Has a distinct geography → local… and developing to developed Has major impacts on lives of individuals and society (origin & host) Debated politically, sociologically, economically and morally Raises issues on power-relationships and equality Content – part 1 Introduction Population change Migration history Patterns Explaining migration Consequences of migration 3  11/11/2024 Content – part 2 Overview of Recent Immigration Characteristics in U.S. Impacts of Immigration on U.S. workers Different Immigration Systems Immigrant Mobility Conclusion Introduction Globalization largely driven by the transnational flow of goods & capital – by integration of capital and goods markets across national borders 4  11/11/2024 Introduction Globalization largely driven by the transnational flow of goods & capital – by integration of capital and goods markets across national borders However, most nations still guard their borders to flows of people Introduction Globalization largely driven by the transnational flow of goods & capital – by integration of capital and goods markets across national borders However, most nations still guard their borders to flows of people Evidence that international migration policy becoming tougher in face of population movements 5  11/11/2024 Introduction However, more people around the world today than at any previous time are living and working outside their country of origin (birthplace) United Nations estimates: 2020 281 million international migrants (3.5% world’s population) 2013 232 million (3.2% world’s population) 2000 175 million 1990 154 million Introduction However, more people around the world today than at any previous time are living and working outside their country of origin (birthplace) United Nations estimates: 2020 281 million international migrants (3.5% world’s population) 2013 232 million (3.2% world’s population) 2000 175 million 1990 154 million 3 out of 4 are aged 20-64 41 million under the age of 20 48% are women 146 million in Global North (advanced industrialized nations) 135 million in Global South (emerging/developing nations) 6  11/11/2024 Population fundamentals Population growth = Pt – Pt-1 , where P is population and t is time 10,000 - 9,000 = 1,000 population growth 7  11/11/2024 Population fundamentals Population growth = Pt – Pt-1 , where P is population and t is time 10,000 - 9,000 = 1,000 population growth Population growth = (B – D) + (I – E) Where B = births, D = deaths, I = immigration and E = emigration 500 – 600 + 1200 – 100 = 1,000 population growth Population fundamentals 𝑃𝑡 −𝑃𝑡−1 10,000−9,000 Rate of population change: = = 11.11% 𝑃𝑡−1 9,000 8  11/11/2024 Population fundamentals 𝑃𝑡 −𝑃𝑡−1 10,000−9,000 Rate of population change: = = 11.11% 𝑃𝑡−1 9,000 𝐵 𝐷 𝐼 𝐸 − + − 𝑃𝑡 𝑃𝑡 𝑃𝑡 𝑃𝑡 Birth-rate Death-rate Immigration-rate Emigration-rate Population fundamentals 𝑃𝑡 −𝑃𝑡−1 10,000−9,000 Rate of population change: = = 11.11% 𝑃𝑡−1 9,000 𝐵 𝐷 𝐼 𝐸 − + − 𝑃𝑡 𝑃𝑡 𝑃𝑡 𝑃𝑡 Birth-rate “natural rate of population change” Death-rate Immigration-rate “net migration rate” Emigration-rate 9  11/11/2024 Population fundamentals 𝑃𝑡 −𝑃𝑡−1 10,000−9,000 Rate of population change: = = 11.11% 𝑃𝑡−1 9,000 𝐵 𝐷 𝐼 𝐸 − + − 𝑃𝑡 𝑃𝑡 𝑃𝑡 𝑃𝑡 Birth-rate “natural rate of population change” Death-rate Immigration-rate “net migration rate” Emigration-rate How did the “Crude Birth Rates” (Births/1,000 population) develop over time? 10  11/11/2024 How did the “Crude Birth Rates” (Births/1,000 population) develop over time? DROPPING 11  11/11/2024 Total Fertility Rate of OECD Countries, 1970-2006 3.0 2.8 2.6 2.4 2.2 2.0 1.8 1.6 1.4 1.2 United Kingdom Czech Republic Belgium OECD-30 Sweden Spain 1.0 1970 1975 1980 1985 1990 1995 2000 2006 Source: OECD Social Indicators, 2009 12  11/11/2024 Total Fertility Rate of OECD Countries, 1970-2006 3.0 2.8 2.6 2.4 2.2 2.0 1.8 1.6 1.4 1.2 United Kingdom Czech Republic Belgium OECD-30 Sweden Spain 1.0 1970 1975 1980 1985 1990 1995 2000 2006 Source: OECD Social Indicators, 2009 Total Fertility Rate of OECD Countries, 1970-2006 3.0 2.8 2.6 2.4 2.2 Replacement level of 2.1 2.0 1.8 1.6 1.4 1.2 United Kingdom Czech Republic Belgium OECD-30 Sweden Spain 1.0 1970 1975 1980 1985 1990 1995 2000 2006 Source: OECD Social Indicators, 2009 13 11/11/2024 14  11/11/2024 Geography Of Migrant Flows 15  11/11/2024 Geography Of Migrant Flows Geography Of Migrant Flows 16  11/11/2024 Geography Of Migrant Flows What percentage of immigrants is “local” in the destination country Asia: (46.1/61.3) * 100 = 75% of immigrants in Asia come from Asia What percentage of emigrants from the origin country stays “local”? Geography Of Migrant Flows Africa: (15.5/29.2) * 100 = 53% of emigrants in Africa stay in Africa What percentage of immigrants is “local” in the destination country Asia: (46.1/61.3) * 100 = 75% of immigrants in Asia come from Asia 17  11/11/2024 Geography Of Migrant Flows 1. Migration differs across regions 2. Migration tends to be local Net Migration By Country, 2011 NB: Net migration is the sum of gross inflows and outflows of migrants 18  11/11/2024 Explaining migration People migrate for a variety of reasons: Explaining migration People migrate for a variety of reasons: To improve their economic circumstances To escape political or religious persecution To escape environmental devastation (Often linked to improving economic conditions) 19  11/11/2024 Explaining migration Historically, migration has been explained by push & pull factors: Push factors: the relative negatives that drive people from their origins Explaining migration Historically, migration has been explained by push & pull factors: Push factors: the relative negatives that drive people from their origins lack of work relatively low wages environmental disasters wars persecution of various kinds 20  11/11/2024 Explaining migration Historically, migration has been explained by push & pull factors: Push factors: the relative negatives that drive people from their origins lack of work relatively low wages environmental disasters wars persecution of various kinds Pull factors: the relative positives that attract migrants Explaining migration Historically, migration has been explained by push & pull factors: Push factors: the relative negatives that drive people from their origins lack of work relatively low wages environmental disasters wars persecution of various kinds Pull factors: the relative positives that attract migrants employment opportunities relatively high wages political & religious freedom social programs of various kinds 21  11/11/2024 Explaining migration Migration is costly: Generally, move if benefits > costs Even if people want to move, not everyone can move This means that the extremely unprivileged tend to be stuck Increasing recognition & evidence in literature Explaining migration Enablers of migration: Lower transport costs Communication possibilities → coordination + social ties 22  11/11/2024 Explaining migration Enablers of migration: Lower transport costs Communication possibilities → coordination + social ties Barriers to migration: Policy restrictions → politically motivated Extreme poverty Religious sentiment “Economically” motivated → blocked at entrance Explaining migration Enablers of migration: Lower transport costs Communication possibilities → coordination + social ties Barriers to migration: Policy restrictions → politically motivated Extreme poverty Religious sentiment “Economically” motivated → blocked at entrance Bias toward HIGH-SKILLED people… (H1B Visa in US) 23  11/11/2024 Consequences of migration In sending countries: 24  11/11/2024 Consequences of migration In sending countries: Relieves unemployment pressures Relieves downward pressure on wages (these likely not significant effects) Results in flow of remittances Wages earned by foreign workers sent back to family members World Bank estimates global flows of remittances (formal) of $529 billion in 2010 UNCTAD estimates this is only ~50% of total flows… But also… brain drain! Consequences of migration In receiving countries: 25  11/11/2024 Consequences of migration In receiving countries: Flows of low-wage, unskilled labor into jobs that native workers seek to avoid Flows of high-wage, skilled labor into sectors where there are not enough high-skilled native workers (H1-B visa program in US) Brain gain! Consequences of migration Issues of debate: Do these flows reduce wages of native-born workers? Most evidence suggests the impact is minor 26  11/11/2024 Consequences of migration Issues of debate: Do these flows reduce wages of native-born workers? Most evidence suggests the impact is minor What about health & welfare costs? Do immigrants contribute equally? Consequences of migration Issues of debate: Do these flows reduce wages of native-born workers? Most evidence suggests the impact is minor What about health & welfare costs? Do immigrants contribute equally? 27  11/11/2024 Consequences of migration Most of these debates focus Issues of debate: on impact on hosts countries Do these flows reduce wages of native-born workers? Most evidence suggests the impact is minor What about health & welfare costs? Do immigrants contribute equally? Consequences of migration Increasing reliance of developed countries on developing countries to maintain population levels Natural increase below replacement levels Needed to meet growing demand for workers 28  11/11/2024 Consequences of migration Increasing reliance of developed countries on developing countries to maintain population levels Natural increase below replacement levels Needed to meet growing demand for workers In OECD, only U.S., New Zealand & Ireland have fertility rates near 2.1% In US this is because of higher fertility rates of migrants who are younger than the population as a whole Consequences of migration Growing international competition for younger, high skilled workers Growing gaps between: Skilled & less-skilled (rising inequality) New empirical evidence suggesting this is unsustainable… 29  11/11/2024 Consequences of migration Growing international competition for younger, high skilled workers Growing gaps between: Skilled & less-skilled (rising inequality) New empirical evidence suggesting this is unsustainable… Immigration policies: Allow high-skilled in Keep the less-skilled out This has huge implications for families and equality Consequences of migration Growing international competition for younger, high skilled workers Growing gaps between: Skilled & less-skilled (rising inequality) New empirical evidence suggesting this is unsustainable… Immigration policies: High-skilled are allowed Allow high-skilled in to contribute and Keep the less-skilled out benefit… but what about the less-skilled? This has huge implications for families and equality 30  11/11/2024 Migration is not new. 31  11/11/2024 Longer Run Patterns Key recent argument is that there were Asian migrations comparable in size to the transatlantic migration of the late-19th & early-20th centuries Key take-aways Migration has been an integral part of human activity for tens of thousands of years But migration levels are higher today than previously in absolute terms Migration facilitated by the transportation & communication technologies of globalization Migration for skilled workers also encouraged by the immigration programs of many different countries → global competition for the most skilled workers For most unskilled workers, national borders are much more difficult to cross, especially those of the advanced, industrialized nations → equality?? Discussion: In many other countries, crossing national borders is part of daily life and raises important & interesting issues of identity 32  11/11/2024 Content – part 2 Overview of Recent Immigration Characteristics in U.S. Impacts of Immigration on U.S. workers Different Immigration Systems Immigrant Mobility Conclusion 33  11/11/2024 The origins of migrants to the U.S. has shifted over time From late-19th/early 20th centuries – flows mainly from Europe Post-1970 flows much more likely to be from Mexico, other parts of Latin America and from Asia More recently still, growing shares originating in parts of Africa & the Middle-east 34  11/11/2024 - Recognize how immigrants differ from the U.S. born population, especially in terms of education - At top end of education – they look almost the same (BA plus) - At bottom end – foreign born share is much greater than the U.S. born share - This has implications for labor market entry & for social/income mobility 35  11/11/2024 Key Facts Regarding Foreign-Born Workforce in the U.S. 1. Immigrants participate in the U.S. labor force at a slightly higher rate than native-born Americans Much higher in agriculture, construction, care work Key Facts Regarding Foreign-Born Workforce in the U.S. 1. Immigrants participate in the U.S. labor force at a slightly higher rate than native-born Americans Much higher in agriculture, construction, care work 2. On average, U.S. immigrants tend to earn less than native-born workers 3. More-educated immigrants earn more than their native-born counterparts 36  11/11/2024 Key Facts Regarding Foreign-Born Workforce in the U.S. 1. Immigrants participate in the U.S. labor force at a slightly higher rate than native-born Americans Much higher in agriculture, construction, care work 2. On average, U.S. immigrants tend to earn less than native-born workers 3. More-educated immigrants earn more than their native-born counterparts 4. Immigrants are about 10% more likely to own businesses than native-born Americans 5. Immigrants start businesses at higher rates more than double the rate of native-born Impacts of Immigration on U.S. workers U.S. debate on wage inequality: Wage inequality has been increasing rapidly in the U.S. since the 1970s 37  11/11/2024 Impacts of Immigration on U.S. workers U.S. debate on wage inequality: Wage inequality has been increasing rapidly in the U.S. since the 1970s Earlier, we examined this increase in terms of: Trade/import (especially from low-wage economies) Skill-biased technological change Impacts of Immigration on U.S. workers U.S. debate on wage inequality: Wage inequality has been increasing rapidly in the U.S. since the 1970s Earlier, we examined this increase in terms of: Trade/import (especially from low-wage economies) Skill-biased technological change We can add to this mix of explanations – immigration 38  11/11/2024 Impacts of Immigration on U.S. workers How? Immigration can change the structure of the labor force. For example - by raising supply of low-skill labor and competition for low-wage jobs → wages drop! Impacts of Immigration on U.S. workers How? Immigration can change the structure of the labor force. For example - by raising supply of low-skill labor and competition for low-wage jobs → wages drop! This will be another explanation for growing inequality But, it’s not easy to examine the impacts of foreign-born workers on the wages of native-born workers 39  11/11/2024 Estimates of Long-Run Impact of Immigration on Wages Percent change in hours worked due Estimated wage impact (percent) to immigration Ottaviano and Peri (2012)5 Borjas(2014)6 1990–2010 1990–2006 1990–2010 Native-born Foreign-born Native-born Foreign-born No degree 25.9 1.7 -8.1 -1.7 -5.3 High school 8.4 0.6 -12.6 0.9 -3.4 degree Some college or 6.1 1.2 -2.2 1.2 -2.7 associate degree Bachelor's degree 10.9 0.0 -5.5 0.5 -4.9 Graduate or professional 15.0 0.0 -5.5 -0.1 -5.3 degree All workers 10.6 0.6 -6.7 0.6 -4.4 http://budgetmodel.wharton.upenn.edu/issues/2016/1/27/the- effects-of-immigration-on-the-united-states-economy Estimates of Long-Run Impact of Immigration on Wages Percent change in hours worked due Estimated wage impact (percent) to immigration Ottaviano and Peri (2012)5 Borjas(2014)6 1990–2010 1990–2006 1990–2010 Native-born Foreign-born Native-born Foreign-born No degree 25.9 1.7 -8.1 -1.7 -5.3 High school 8.4 0.6 -12.6 0.9 -3.4 degree Some college or 6.1 1.2 -2.2 1.2 -2.7 associate degree Bachelor's degree 10.9 0.0 -5.5 0.5 -4.9 Graduate or professional 15.0 0.0 -5.5 -0.1 -5.3 degree All workers 10.6 0.6 -6.7 0.6 -4.4 http://budgetmodel.wharton.upenn.edu/issues/2016/1/27/the- effects-of-immigration-on-the-united-states-economy 40  11/11/2024 Broader Impacts of Immigration Contributions to federal and state taxes Tend to be lower because of lower incomes Broader Impacts of Immigration Contributions to federal and state taxes Tend to be lower because of lower incomes Tax burden in some states higher because of younger age & demands for K-12 education Socio-economic composition of immigrants critical here (education and age) Short-run costs offset by upward economic mobility and tax-paying of second generation 41  11/11/2024 Broader Impacts of Immigration Contributions to federal and state taxes Tend to be lower because of lower incomes Tax burden in some states higher because of younger age & demands for K-12 education Socio-economic composition of immigrants critical here (education and age) Short-run costs offset by upward economic mobility and tax-paying of second generation But… Younger age distribution of immigrants reducing the burden of financing retirement for a growing elderly population Social and cultural diversity difficult to quantify, but net positives for most Immigrants generate demand for products / services How Do Different Countries Handle Immigration? 42  11/11/2024 Different Immigration Systems Two types of systems: Family Reunification vs. Merit-Based Systems Family reunification: Tends to drive diversification - if country has diversity to start with Similar effects from humanitarian migration and diversity lotteries Different Immigration Systems Merit-based (or points based) immigration systems: Select immigrants based on: language proficiency education credentials age work experience skills Were designed, in part, to reduce racial and ethnic bias. 43  11/11/2024 Different Immigration Systems Merit-based (or points based) immigration systems: Select immigrants based on: language proficiency education credentials, age work experience skills Were designed, in part, to reduce racial and ethnic bias. Evidence suggests they tend to reinforce those biases Because points are amassed by individuals in industrialized economies rather than elsewhere Linked to “brain-drain” – stripping emerging economies of their most skilled workers Immigrant Mobility Often discussed as “social” mobility, not only geographical mobility 44  11/11/2024 Immigrant Mobility Often discussed as “social” mobility, not only geographical mobility Social mobility (with respect to migration) indicates to what extent 2nd generation immigrants (the children of immigrants) do better in terms of socio-economic measures than their parents (immigrants). Higher education Greater income Healthier lives Prestige jobs Immigrant Mobility Often discussed as “social” mobility, not only geographical mobility Social mobility (with respect to migration) indicates to what extent 2nd generation immigrants (the children of immigrants) do better in terms of socio-economic measures than their parents (immigrants). Higher education Greater income Healthier lives Prestige jobs Social mobility in the U.S. is tightly linked to the ‘American Dream’ 45  11/11/2024 Immigrant Mobility: Strong Evidence of Rapid Catch-Up Top 25th percentile Source: Chetty et al. 2014, Where is the land of opportunity? Bottom 46  11/11/2024 Key take-aways The originating countries from immigrants in the U.S. has been changing Little evidence that immigration has negative impacts in the labor market On some measures we see evidence for social mobility (catch up) But not everywhere & for everyone Important: these arguments are quite variable for diverse types of immigrants, especially those with high/low education & skills 47