The prospect of enlarging the European Union by taking in former members of the Soviet bloc has pushed migration to the top of the European political agenda. CEPR has contributed to this debate by publishing a number of Discussion Papers recently that consider different aspects of the migration process.
What causes migration to OECD countries?
DP3559 What Fundamentals Drive World Migration?
Tim Hatton (University of Essex and CEPR), Jeffrey G Williamson (Harvard University)
September 2002
'If OECD countries think they have a problem now, they are going to find the future a lot more challenging', conclude Tim Hatton and Jeffrey Williamson.
OECD governments note rising immigration with alarm and grapple with policies aimed at selecting certain migrants and keeping out others. Economists appear to be well armed to advise governments, but they are much less well armed to speak to the determinants of the world migrations that give rise to public alarm. This Paper offers a quantitative assessment of the economic and demographic fundamentals that have driven and are driving world migration. How do inequality and poverty influence world migration? Is it useful to distinguish between migration pressure and migration ex-post, or between the potential demand for visas and the actual use of them?
The authors conclude that: (1) successful development and poverty eradication in the Third World will allow potential emigrants to move from the poorest parts of the world, like China, South Asia, Asia and Africa; (2) while the rising income levels in labour surplus parts of the world - like China and India - will reduce the motivation for migration, it looks like Africa will not be catching up; (3) there is growing imbalance between the shrinking young adult shares in the OECD and the rising young adult shares in South Asia, Africa and other parts of the Third World. This imbalance played an important part in migration in the past and will in the future; (4) as foreign migrants increase as a share of total residents in high-wage countries, the pressure on annual immigration flows will rise too.
Migrants with poor English fall into 'language trap'
DP3527 Enclaves, Language and the Location Choice of Migrants
Thomas Bauer (Institute for the Study of Labour and CEPR), Gil S Epstein
(Bar-Ilan University and CEPR) and Ira Gang (Rutgers University)
September 2002
Using data on Mexican-US migration, this paper shows that migrants with poor
English choose to migrate to destinations with large ethnic enclaves. The main reason for this is
that as the size of the enclave increases, the need
for using English decreases. This in turn decreases their ability to increase
their English, hindering their earning potential and assimilation into the
local population. The authors conclude that large enclaves are a potential
for a 'language trap'; they attract workers with little knowledge of
English and sustain their poor abilities.
Following the herd
DP3505 Herd Effects or Migration Networks? The Location Choice of Mexican Immigrants in the US
Thomas Bauer (IZA and CEPR), Gil S Epstein (Bar-Ilan University and CEPR) and Ira Gang (Rutgers University)
August 2002
CEPR Discussion Paper 3505 addresses the question: Why and where do immigrants cluster? The authors examine the relative importance and interaction of two alternative explanations of immigrant clustering: (1) network externalities and (2) herd behaviour. In order to distinguish between herd and network externalities, the study uses the Mexican Migration Project data. The argument for herd behaviour implies immigrants think: 'I will go where I have observed others go, because all these others who went before most probably have information that I do not have', thus immigrants discount their own private information. Whereas network externalities imply 'I will go where my people are, since it will help me', therefore the stock of immigrants in a certain location directly affects the benefits an immigrant will receive from joining an ethnic community.
The empirical results show that both network externalities and herds have significant effects on the migrant's
decision of where to migrate. Moreover, the significance and size of the effects vary according to the legal
status of the migrant and whether the migrant is a 'new' or a 'repeat' migrant. Legal and skilled
migrants appear to be less dependent on network externalities than illegal and unskilled migrants.
Opinions polls do not accurately reflect attitudes towards immigrants
DP3449 The Political Economy of EU Enlargement: Lessons from Switzerland
Jaime de Melo (Université de Geneve and CEPR), Florence Miguet (Université de Geneve), Tobias Müller (Université de Geneve)
July 2002
The EU will soon take in 12 European states as new members raising the population by 28% to 480 million. Under current community law, the new member states would benefit from the four basic freedoms of the Treaty of Rome. This means that people, capital, goods and services would circulate freely. The EU Commission has used extensive surveys in an attempt to gauge people's attitudes toward immigration. The study draws on the experience of the Swiss population, which has absorbed a great number of immigrants over the last twenty years. At the same time anti-immigration attitudes seem to be less prevalent in Switzerland than in other EU countries.
Authors Melo, Miguet and Müller find that the results from European opinion polls are probably overly pessimistic as they are likely to suffer from a 'hypothetical bias'. Their analysis indicates that opinion polls do not accurately reflect voting patterns. The authors use a survey taken after a vote in Switzerland that proposed placing a limit on the stock of immigrants within the country. They highlight the fact that while the opinion polls recommended imposing a ceiling on the number of immigrants, the following vote clearly rejected the proposal.
European governments turn blind eye to illegal work
DP3433 Shadow Activity and Unemployment in a Depressed Labour Market
Tito Boeri (Università Bocconi and CEPR) and Pietro Garibaldi (Università Commerciale Luigi Bocconi and CEPR)
June 2002
This Paper studies the relationship between shadow employment and unemployment. It uses the definition of a labour market as: 'all economic activities which contribute to the officially-calculated GNP but are currently unregistered'. The authors of this study find that all available studies on the shadow labour market confirm two things:
1. That there is an established upward trend in the size of the shadow economy in
European countries, Schneider (2000) estimates that the number of people working in
the unofficial economy in Europe doubled between 1978 and 1998
2. That depressed regions, with low productivity and high unemployment, have
significantly higher shares of unregistered activities than prosperous regions.
The dilemma for policy-makers is that, taking aggressive action to reduce the
shadow economy may fail and increase unemployment. And this explains why the
growth of the informal sector has been tolerated for so long within OECD countries.
Using data from direct surveys with illegal workers and official statistics the authors suggest that in order to reduce shadow employment, it is necessary to reduce unemployment. That is to say, the current debate over illegal workers should focus upon reducing unemployment through job creation by reducing labour market regulation and improving labour mobility. Illegal workers and the unemployed share many of the same characteristics and the adoption of this policy would then ease workers transition from shadow to legal employment.
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