Do Immigrants Grease the Wheels of Globalization?
Paper Session
Saturday, Jan. 4, 2025 2:30 PM - 4:30 PM (PST)
- Chair: Brett McCully, Collegio Carlo Alberto
Abundance from Abroad: Migrant Income and Long-Run Economic Development
Abstract
How does income from international migrant labor affect the long-run development of migrant-origin areas? We leverage the 1997 Asian Financial Crisis to identify exogenous and persistent changes in international migrant income across regions of the Philippines, derived from spatial variation in exposure to exchange rate shocks. The initial shock to migrant income is magnified in the long run, leading to substantial increases in income in the domestic economy in migrant-origin areas; increases in population education; better-educated migrants; and increased migration in high-skilled jobs. 77.3% of long-run income gains are actually from domestic (rather than international migrant) income. A simple model yields insights on mechanisms and magnitudes, in particular that 23.2% of long-run income gains are due to increased educational investments in origin areas. Improved income prospects from international labor migration not only benefit migrants themselves, but also foster long-run economic development in migrant-origin areas.Third-Country Effects of U.S. Immigration Policy
Abstract
We study the effects of U.S. skilled immigration restrictions on the Canadian economy and on American workers’ welfare. In 2017, a new policy tightened the eligibility criteria for U.S. visas and was followed by a sharp increase in the number of skilled immigrant admissions to Canada. We use time and cross-sectional quasi-experimental variation introduced by this policy, along with U.S. and Canadian visa application data, to show that the policy led to a 30% higher level of Canadian applications in 2018. We then use the universe of Canadian employer-employee-linked records, immigration records, and data on international trade in goods and services to show that Canadian firms that were relatively more exposed to the inflow of immigrants increased production, exports, and the wage bill paid to native workers. Finally, we study the policy’s impact on the welfare of American and Canadian workers by incorporating immigration policy into a multi-sector model of international trade. Our analytical results show that U.S. restrictions affect immigration to other countries, in turn affecting American wages through changes in consumption and U.S. export prices. We calibrate the model using our data and reduced-form estimates. We find that the welfare gains for American workers targeted for protection are up to 25% larger in a closed economy compared to an economy with the observed trade levels.Rural-Urban Migration and Market Integration
Abstract
We combine a unique collection of microdata from China with a natural experiment to investigate the extent to which reductions in rural-urban migration costs cause increases in flows of trade and investment and the underlying channels. We find that reductions in bilateral migration costs significantly increase rural-urban exports, imports, capital inflows and outflows, both in terms of bilateral transaction values and the number of unique buyer-seller matches. These effects are more pronounced among bilateral connections that are initially less integrated and rural origins with lower initial levels of economic development. We then use our estimates to quantify the implications of China’s recent Hukou reforms on urban migration market access among rural counties and the resulting gains in trade market access from reductions in buyer-seller matching frictions due to rural-urban migration. We find that a 10% increase in a region’s urban migration market access on average leads to a 2% increase in trade market access among rural regions. We also find that these additional gains from trade from migration were on average significantly larger among the urban destinations of the Hukou reforms compared to the rural origins, thus reinforcing the incentives for rural-urban migration in spatial equilibrium.Discussant(s)
Hong Ma
,
Tsinghua University
Samuel Kortum
,
Yale University
Ziho Park
,
National Taiwan University
Chaoran Chen
,
York University
JEL Classifications
- F0 - General
- J1 - Demographic Economics