Migratory pressures in the long run : international migration projections to 2050

Artículo de revistaThis article presents bilateral international migration projections to 2050 based on a new methodology that takes into account the population growth both in countries of origin and countries of destination. To do this, the methodology used by Hanson and McIntosh (2016) to project the future migratory flows to a sample of OECD countries is generalised to all countries worldwide. The United Nations population growth forecasts are used as a basis for projecting future migratory flows. The main findings of the exercise indicate that the number of migrants is projected to increase from 2.8% of the world population in 2010 to around 3.5% in 2050, as a result of the strong increase in migrants from India and sub-Saharan Africa. Against this background, and despite the slowdown in demographic growth in Latin America, the United States is expected to continue to receive high net immigration flows and to remain the country with the highest stock of immigrants globally, while continental Europe will post larger net immigration flow

International migration pressures in the long run

En este trabajo se estima la contribución del crecimiento demográfico a la migración bilateral por medio de un modelo gravitacional y se utilizan los resultados para proyectar flujos migratorios basados en las previsiones de crecimiento demográfico de las Naciones Unidas. Para ello se extiende la metodología de Hanson y McIntosh (2016), y se incluyen países de destino que no pertenecen a la OCDE, para así obtener proyecciones para prácticamente todos los países del mundo. En contraposición con los resultados de Hanson y McIntosh, y a pesar del menor crecimiento demográfico esperado en América Latina, Estados Unidos continuará expuesto a presiones inmigratorias a causa del fuerte crecimiento demográfico en otras regiones del mundo. También se proyecta un incremento del número de migrantes a nivel global, de 2,8 % de la población mundial en 2010 a 3,5 % en 2050, fundamentado en un aumento sustancial de migrantes provenientes de la India y el África subsaharianaUsing an empirical gravity model, I estimate the contribution of changes in relative labor supply to bilateral migration in the 2000s and apply the resulting estimates to project future bilateral flows based on population forecasts by the United Nations. I extend the work of Hanson and McIntosh (2016) by including non-OECD destinations and project international migration flows for the whole world. In contrast to their findings, and despite of the slowdown of population growth in Latin America, the US will face sustained immigration pressures because of strong population growth in other regions of the world, leading to a projected immigrant stock that grows for decades to come. For the world as a whole, international migrants are projected to increase from 2.8% of total world population in 2010 to 3.5% in 2050, with a substantial increase of migrants originating from India and Sub-Saharan Afric

Measurement error and imputation of consumption in survey data

We study how estimators used to impute consumption in survey data are inconsistent due to measurement error in consumption. Previous research suggests instrumenting consumption to overcome this problem. We show that, if additional regressors are present, then instrumenting consumption may still produce inconsistent estimators. This inconsistency arises from the correlation between additional regressors and measurement error. We propose an additional condition to be satisfied by the instrument that reduces measurement error bias. This condition is directly observable in the data. We apply our findings by revisiting recent research that imputes consumption data from the CEX to the PSID.Campos and Reggio gratefully acknowledge the financial support by the Spanish Ministerio de Ciencia y Tecnología (Grants ECO2009-13169 and ECO2009-11165) and Ministerio de Economía y Competitividad (grants ECO2012-38134 and ECO2012-31358)

Consumption in the shadow of unemployment

By how much do employed households reduce their consumption when the aggregate unemployment rate rises? In Spain during the Great Recession a 1 percentage point increase in the unemployment rate was related to a strong drop in household consumption of more than 0.7% per equivalent adult. This reduction is the response of forward-looking agents to downward revisions of their expectations on future income growth rates: the shadow of unemployment. Using consumption panel data that include information on physical quantities, we show that the drop in consumption expenditure was indeed a reduction in quantities, and not a switch to cheaper alternatives¿En cuánto se reduce el consumo de los hogares, aun de aquellos que continúan empleados, cuando aumenta la tasa de paro? En España, durante la Gran Recesión, un punto adicional de aumento en la tasa de paro estuvo asociado a una caída de 0,7 % de caída del consumo por adulto equivalente. Esta reducción del consumo refl eja el deterioro de las expectativas de ingreso de los hogares. Utilizando datos de panel que incluyen información sobre cantidades físicas, encontramos que la caída en el gasto de consumo se debe a una reducción en las cantidades, y no en los precio

An estimation of the effects of Brexit on trade and migration

Este documento utiliza un modelo de gravedad para estimar los efectos del brexit en dos dimensiones: el comercio de bienes y la migración. Simulamos dos escenarios: 1) no acuerdo, con reversión a las reglas de la OMC y sin trato especial para los migrantes2) firma de un acuerdo bilateral de libre comercio (TLC). Según nuestros resultados, el brexit puede tener efectos negativos importantes sobre el comercio y los flujos migratorios entre la UE y el Reino Unido. En el escenario de la OMC, se prevé que los flujos comerciales disminuyan en un 30 % y la migración en cerca de un 25 %. Si el Reino Unido y la UE firman un acuerdo similar a un TLC (que no incluye la libre movilidad de la mano de obra), los efectos negativos sobre el comercio se reducen, aunque no hay una diferencia significativa en términos de migraciones con respecto al escenario de la OMCThis paper uses a gravity model approach to estimate the effects of Brexit in two dimensions: trade in goods and migration. We simulate two scenarios: 1) no agreement with reversion to WTO rules and no special treatment for migrants2) signature of a bilateral free trade agreement (FTA). According to our results, Brexit may have large negative effects on trade and migration flows between the EU and the UK. In the WTO scenario, trade flows are predicted to drop by 30% and migration by close to 25%. If the UK and the EU sign an FTA-like agreement (which does not include free mobility of labour), the negative effects on trade are lessened although there is no significant difference in terms of migration with respect to the WTO scenari

Latin America and the Caribbean: trade relations in the face of global geopolitical fragmentation risks

Rationale A geopolitical fragmentation of world trade, i.e. the emergence of two blocs that restrict trade with countries in the other bloc, has recently become a more likely prospect. How does this geopolitical risk affect the trade and economic outlook for Latin America and the Caribbean? Takeaways •Countries in Latin America and the Caribbean differ in terms of both their trade openness and the geographical structure of their trade. •They are therefore heterogeneously exposed to the risk of geopolitically fragmented trade. •We quantify each country’s exposure and analyse how Latin America can harness greater trade integration with the European Union to reduce the costs of a potential fragmentation of world trade

Optimal Unemployment Insurance : Consumption versus Expenditure

We study the optimal provision of unemployment insurance (UI) in a framework that distinguishes between consumption and expenditure. We derive a "sufficient statistics" formula for optimal UI that is expressed terms of observable variables and can therefore be used in applied work. Recent research has shown that unemployed households pay less per unit of consumption than employed households. This finding has two counteracting effects on the optimal level of UI. On the one hand, consumption smoothing benefits identified from expenditure data overestimate the true marginal benefits of UI. On the other hand, UI benefits become more valuable because they buy more consumption when unemployed. In an optimal design, which effect dominates depends on the curvature of the utility function. We show that for relative risk aversion larger than one the first effect dominates, leading to lower levels of optimal UI.We gratefully acknowledge financial support by the Spanish Ministerio de Economía y Competitividad (Grants ECO2012-38134 and ECO2012-31358)

The real income channel and contractionary devaluations in a heterogeneous agent model for Latin America

Rationale In Latin America, it is not unusual to see exchange rate depreciations in excess of 20% in a single year. Although depreciation tends to stimulate a country’s net external demand, it does not always lead to increased output. It is worth understanding which channels may explain this outcome. Takeaways •In conventional macroeconomic theory, exchange rate depreciations have expansionary effects on economic activity. However, the empirical evidence shows that, in the case of emerging market economies, devaluing the exchange rate may cause output to contract. •One channel that explains this evidence, known as the real income channel, operates through the erosion of purchasing power as a result of rising prices for imported goods, which can lead to a fall in the real consumption of households with limited access to financial markets. •This article discusses a heterogeneous agent model calibrated for the main Latin American economies that allows the importance of this channel to be measured. The results show that this channel may have a sizable macroeconomic impact, particularly on economies more open to international trade

Thick borders in Franco’s Spain: the costs of a closed economy

Entre las décadas de 1940 y 1970, en España se emplearon varias políticas económicas que limitaban el comercio internacional. La combinación de aranceles, restricciones cuantitativas, barreras administrativas y regímenes cambiarios utilizados sufrió frecuentes cambios durante ese período, lo que hace particularmente difícil la cuantificación de su impacto sobre el comercio internacional. En este trabajo se utilizan flujos comerciales históricos y un modelo de gravedad estructural para cuantificar la evolución de una medida, llamada border thickness, que captura de forma resumida las barreras al comercio internacional de un país. Según esta medida, las trabas al comercio en el período 1948-1975 fueron más elevadas que las de cualquier otro país de Europa occidental, incluso una vez iniciado el período de liberalización comercial, que comenzó en 1959. Los elevados impedimentos al comercio tuvieron un efecto negativo considerable sobre el bienestar de los consumidores. Los resultados de este trabajo indican que las pérdidas acumuladas de bienestar en el período 1948-1975 exceden el valor del 20 % del consumo total anual de España.Between the 1940s and 1970s, Spain used a variety of economic policies that hindered international trade. Because the mix of tariffs, quotas, administrative barriers, and exchange rate regimes varied greatly over time, the quantification of the effect of the various trade policies on international trade in this period is particularly elusive. In this paper, we use historical bilateral trade flows and a structural gravity model to quantify the evolution of Spain’s border thickness, a summary measure of its barriers to international trade. We find that Spain’s borders in the period 1948-1975 were thicker than those of any other country in Western Europe, even after the liberalization of trade that started in 1959. These comparatively higher impediments to international trade implied substantial negative effects on consumer welfare. We estimate that accumulated welfare costs over the period 1948-1975 exceed 20% of a year’s total consumption

Micro versus macro consumption data: the cyclical properties of the consumer expenditure survey

The Consumer Expenditure Survey (CEX) offers the most comprehensive consumption data at the consumer level for the United States. Several previous studies have shown a large gap between per-capita consumption from the CEX and the aggregate Personal Consumption Expenditure (PCE) series. While previous research has focused on consumption levels, we focus on the cyclical properties of consumption. We find that the cyclical properties of consumption expenditure data from the two sources are quantitatively very different. This result calls for caution when using CEX data for business cycle researchCampos and Reggio gratefully acknowledge the financial support by the Spanish Ministerio de Ciencia y Tecnología (Grants ECO2009-13169 and ECO2009-11165