The informational structure of migration decision and migrants’ self-selection

This paper derives the implications for migrants’ self-selection in unobservables that arise from the introduction of uncertainty in the decision problem that would-be migrants face. We show that if one lifts the assumption introduced in Borjas (1987) that foreign wages are known before the migration decision is taken, then the case for the so-called refugee sorting narrows down considerably, while negative selection becomes a more likely outcome. A greater dispersion of income at destination no longer suffices to predict that immigrants will obtain a higher average income than natives.migration; uncertainty; information; self-selection

The Impact of Material Offshoring on employment in the Italian Manufacturing Industries: the Relevance of Intersectoral Effects

The lively media debate on the employment consequences of offshoring is not yet backed by an adequate empirical evidence around its actual effects. This paper relies on sectoral data to assess the impact of material offshoring on employment in the Italian manufacturing industries; with just one exception, sectoral-level analysis treat sectors as independent clusters of firms, while we introduce an index built on input-output data that captures the intersectoral spill-over effects of offshoring. The econometric analysis provides evidence that the direct effects of offshoring on employment are not significant once one allows for scale effects, while the intersectoral effects are negative and highly significant. This is consistent with the intuition that offshoring can lead to the disruption of domestic sub-contracting relationships, and that the adverse occupational consequences are not concentrated in the sectors that are directly involved in the offshoring process. Although such a finding should by no means regarded as supportive of a pessimistic perspective about the aggregate economic consequences of offshoring, it is nevertheless suggestive transitional costs can be substantial and diffuse.

Extending the case for a beneficial brain drain

The recent literature about the so called brain drain assumes that destination countries are characterized not only by higher wages than the source country, but also by a higher or at least not lower relative return to skill. As this assumption has a doubtful empirical validity, we assess whether the main prediction of this literature, namely the possibility of a beneficial brain gain, still holds under the reverse assumption. We show that there is still a case for a beneficial brain drain. Immigration policies that are biased against unskilled workers are not necessary for a beneficial brain drain to occur once one considers that agents face heterogeneous migration costs.migration; brain drain; skill premium; heterogeneous agents; selective immigration policies

Selective Immigration Policies, Migrants' Education and Welfare at Origin

Destination countries are progressively shifting towards selective immigration policies. These can effectively increase migrants' average education even if one allows for endogenous schooling decisions and education policies at origin. Still, more selective immigration policies reduce social welfare at origin.international migration, selective immigration policies, education policies, social welfare

Selective immigration policies, migrants' education and welfare at origin

Destination countries are progressively shifting towards selective immigration policies. These can effectively increase migrants' average education even if one allows for endogenous schooling decisions and education policies at origin. Still, more selective immigration policies reduce social welfare at origin.international migration; selective immigration policies; education policies; social welfare

Migration, remittances and poverty in Ecuador

Etudes & documentsWe analyse the influence of the recent wave of migration on the incidence of poverty among stayers in Ecuador. We draw our data from a survey that provides detailed information on migrants. The analysis reveals a significant negative effect of migration on poverty among migrant households. This effect is substantially smaller than the one that we find focusing on recipient households. We explore the factors that account for this divergence. Our analysis entails that the existing empirical evidence on the relationship between remittances and poverty needs not to be informative about the size of the direct poverty-reduction potential of migration

Crossing the Border: Self-Selection, Earnings and Individual Migration Decisions

Many empirical studies on the determinants of international migration flows rely exclusively on macro data, and do not account for migrants' self-selection. We analyze a very interesting episode in international migration for which we are able to gather individual-level data covering all relevant countries, namely the exodus of Ecuadorians to Spain and the US in the aftermath of the economic collapse of 1999. Specifically, we produce selection-corrected predictions of counterfactual individual earnings and use them to estimate a discrete-choice migration equation that allows for correlated errors across destinations and a rich structure of migration costs. We find that earnings significantly shape individual migration decisions, even in an episode in which Ecuadorians mostly chose Spain where earnings were lower than in the US, and they contribute to explaining the observed composition of migration flows. Moreover, our estimates show that changes in earnings at a particular destination have a larger effect on destination choice conditional on migration than on the scale of migration.international migration, self-selection, earnings, individual-level data