The Impact of New Immigration in native Wages: A Cross-occupation Analysis of a Small Open Economy

This paper examines how immigration affects native wages by exploiting an unexpected episode of immigrant influx. The episode happened in Hong Kong, when its government unexpectedly relaxed the restriction on immigration from mainland China in 1993, resulting in a seven-fold increase in the net inflow of Chinese immigrants between 1992 and 1993. We use variation in the employment share of immigrants across occupations for identification. To tackle endogeneity between wages and immigrant inflows across occupations, we use Welch’s (1999) congruence indices, which capture the degree of substitutability between workers from different skill groups, to construct instruments for the prevalence of Chinese immigrants in an occupation. Using micro-level data, our two-stage-least-squares estimates show that a 1 percentage point increase in the ratio of new Chinese immigrants to natives decreases native monthly real wages in the same occupation by 2.8-3.6 percents (controlling for immigrant shocks in similar occupations). Within an occupation, female and more skilled native workers experience more adverse wage impact, reflecting a high switching cost associated with occupation-specific human capital.Immigration, Labor Market Outcomes, Occupation-specific Human Capital

The Housing Boom and the Rise of Localism in Hong Kong: Evidence from the Legislative Council Election in 2016

Localist parties have become an emerging force in Hong Kong’s political landscape. What has caused the rise of localism in the city? Extant studies focus on cultural and social factors. In this article, we propose a political economy explanation: global and regional economic factors have caused a housing boom in Hong Kong since the mid-2000s and produced impactful redistributive consequences. While homeowners benefit tremendously from the hike in asset prices, non-homeowners stand to lose. Their divergent economic interests then translate into political preferences; homeowners support political parties that favour the status quo, while non-homeowners tend to support those that challenge it. Using a newly available public opinion survey, we find preliminary evidence in support of our argument. In particular, homeowners are less likely to identify with localist parties and tend to vote for pro-establishment ones. High-income earners, however, are more likely to vote for localist parties

Boom immobilier et essor du localisme à Hong Kong

Les partis localistes deviennent une force émergente dans le paysage politique hongkongais. Quelles sont les causes de l’essor du localisme au sein du territoire ? Les études existantes s’attachent à en analyser les facteurs culturels et sociaux. Dans cet article, nous proposons une explication politico-économique : des facteurs économiques régionaux et internationaux sont responsables du boom immobilier à Hong Kong depuis le milieu des années 2000 avec d’importantes conséquences sur le plan de la redistribution des richesses. Alors que les propriétaires de logement bénéficient largement de l’envolée des prix de l’immobilier, les non-propriétaires ont eux beaucoup perdu. Leurs intérêts économiques divergents se traduisent alors en orientations politiques distinctes ; les propriétaires soutiennent les partis qui défendent le statu quo, tandis que les non-propriétaires s’orientent vers ceux qui le remettent en question. Grâce aux données récemment disponibles d’un sondage d’opinion, nous apportons les premiers résultats pour soutenir notre thèse. Plus précisément, les propriétaires de logement sont moins susceptibles de s’identifier aux partis localistes et tendent à voter pour les partis pro-gouvernement. Cependant, les personnes à haut revenu tendent plutôt à voter pour les partis localistes.Localist parties have become an emerging force in Hong Kong’s political landscape. What has caused the rise of localism in the city? Extant studies focus on cultural and social factors. In this article, we propose a political economy explanation: global and regional economic factors have caused a housing boom in Hong Kong since the mid-2000s and produced impactful redistributive consequences. While homeowners benefit tremendously from the hike in asset prices, non-homeowners stand to lose. Their divergent economic interests then translate into political preferences; homeowners support political parties that favour the status quo, while non-homeowners tend to support those that challenge it. Using a newly available public opinion survey, we find preliminary evidence in support of our argument. In particular, homeowners are less likely to identify with localist parties and tend to vote for pro-establishment ones. High-income earners, however, are more likely to vote for localist parties

Migrants and Democratization: The Political Economy of Chinese Immigrants in Hong Kong

In this article, we argue that immigrants can serve as staunch support of the conservative incumbents of a regime, due to a self-selection effect; immigrants are more likely to accept the political status quo and be less sympathetic to the opposition who might demand progressive changes. Based on Asian Barometer survey data in Hong Kong, we showed that Chinese immigrants in Hong Kong are more pro-establishment and supportive of pro-government parties. With China’s huge population, this implies a strategic importance of Chinese migrants, whose inflow to other Asian states can significantly skew the politics of neighbouring states in destined directions