Flashcards
Migration
Cards in this deck (22)
- 1Who are the main 2 voices in the migration debate? What stance do they take?Borjas - benefit too small to justify cost
Card - migration is good - 2What doe migration research examine?Who migrates? To where?
What is the impact on natives? - 3What does Borjas do?Analyses occupational choice (preferences, earnings potential) in context of migration
Selection of people choosing to migrate determines size + composition of migrant flow (self selection) - 4How are skills and migration related?Skills vary across country of origin
Skills determine earnings potential which determines migration - 5What is negatively selective migration flow?Low skilled workers leave the country
- 6When do induviduals self select to migrate?when the wage in the destination country exceeds the wage in the source country
- 7What is the effect of a negative income shock in the destination country?Shifts the wage curve down moving the cut off skills level in the direction of less migration
The type of selection observed does not change - 8How does income inequality effect migration?- Income inequality in the source country has implications for returns to skills
- More equal countries have flatter curves in skill, wage space
- Higher income inequality in the destination country implies positive selective migration - 9How are migration costs likely to vary with skill? What is observed?Migration costs decline with skill level
Observe that migration is niether positive or negative but comes from the middle - 10What is the expected impact on natives when there is an influx of migrants?More migrants = more labour supply = lower wage = higher total employment which masks lower native employment
- 11What is the expected impact on natives when there is an influx of migrants if migrants and natives are perfect subsititutes?The 2 groups compete in the same labour market
Labour supply curve shifts right = lower wage = higher total employment but masks lower negative employment - 12What is the expected impact on natives when there is an influx of migrants if migrants and native are compliments?The 2 groups do not compete in the same labour market
Immigration makes natives more productive so labour demand increases = higher wage for native + higher native employment - 13Compare impact on natives when labour demand is elastic and inelasticMore elastic labour demand implies migrant influx pushes wages down but by less than non-elastic labour demand so the fall in wage and native employment is smaller
- 14What is the general equilibrium effect of an influx of migrants?Natives may move to other markets
Influx into A shift labour supply right which decreases wage causing worker to move to B.
Labour supply in B then increases which decreases the wage.
Labour supply in A decreases so the curve shifts left, increasing the wage
This occurs until wage is equalised at a lower wage than original but higher than if workers had not moved - 15What is alternative adjustment mechanism?Suppose there are 2 industries, 1 low-skill intensive and 1 high-skill intensive
Increasing unskilled supply = lower unskilled wage = cheaper to produce good with unskilled labour more intensively causing unskilled industry to expand = increase in unskilled demand = increase in wage - 16What is the short and long run effect of alternative adjustment mechanism when natives and migrants are perfect subsititutes?Short run: lower wages + more employment as more supply
Long run: demand increases as more firms are attracted to the sector, back to original wage but more employment - 17How does alternative adjustment mechanism affect changes in technology?The change in labour supply for industry with no fixed production technology may cause industries to choose different production technologies
If labour becomes cheaper there is no incentive to adopt new technology
When cheap labour is not available, it might be more profitable/less costly to increase tech use - 18What is the standard regression for migration?native wages or employment as a function of immigrant share
- 19What are the 2 empirical problems faced when studying migration?1. endogeniety of migration decision: more likely to relocate to areas with high labour demand or established immigrant population from the same country of origin
2. outmigration of natives: may relocate to counteract lower demand
Both would underestimate effects - 20How is each empirical problem combated?1. use natural experiment e.g. refugee dispersal programs
2. Card and DiNardo (2000) find there is little evidence for this - 21Summarise a study that estimates the effect of immigrants on native employmentCard (1990)
Uses natural experiment of Fidel Castro allowing Cubans to leave for the US for a limited period in 1980
Compare labour market outcome of residents in Miami (closest city) to people in 4 comparison cities
Important assumption is that Miami and control cities followed the same trends - 22What was found in the paper estimating the effect of immigrants on native employment?No evidence that influx adversely affected employment rate in Miami
Wages remained relatively stable in Miami and comparison cities
Lower wage, more manual jobs completed by new Cubans relative to more established Cuban
No selection as all immigrant went to Miami however selection could be in the form of remaining in Miami which would bias estimates towards 0
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- Year 2 ECN21005 - Labour Economics Flashcards on Migration, created by Imogen Donoghue on 29/01/2023.
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- Imogen Donoghue
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