International migration and the role of institutions

Public Choice (Impact Factor: 0.91). 10/2008; 137(1):81-102. DOI: 10.1007/s11127-008-9314-x
Source: RePEc

ABSTRACT Migration flows are shaped by a complex combination of self-selection and out-selection mechanisms. In this paper, the authors analyze how existing diasporas (the stock of people born in a country and living in another one) affect the size and human-capital structure of current migration flows. The analysis exploits a bilateral data set on international migration by educational attainment from 195 countries to 30 developed countries in 1990 and 2000. Based on simple micro-foundations and controlling for various determinants of migration, the analysis finds that diasporas increase migration flows, lower the average educational level and lead to higher concentration of low-skill migrants. Interestingly, diasporas explain the majority of the variability of migration flows and selection. This suggests that, without changing the generosity of family reunion programs, education-based selection rules are likely to have a moderate impact. The results are highly robust to the econometric techniques, accounting for the large proportion of zeros and endogeneity problems.

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Available from: Graziella Bertocchi, Sep 27, 2015
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    • "Regarding the first hypothesis, Bertocchi and Strozzi (2008) show that migration decisions are made over a long horizon. We suggest that an individual's migration decision depends more on expectations about future income levels than on current income levels. "
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    • "The drivers of economic migration include absolute and relative poverty ( Czaika & de Haas , 2012 ; Stark & Taylor , 1989 ) , institutions ( Bertocchi & Strozzi , 2008 ) , the income gap between origin and destination countries and the destination ' s immigration laws ( Ortega & Peri , 2009 ) , among others . In addition , migrant networks furnish information , help , and ethnic goods to movers ( Bauer , Epstein , & Gang , 2000 ) . "
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    ABSTRACT: The extant literature has focused on migration’s consequences for the receiving countries. In this paper, we ask a different but important question: how much do migrants gain from moving to another country? Using Gallup World Poll data and a methodology combining statistical matching with difference-in-differences, we assess migration’s effects on the wellbeing of migrants from transition economies. We contribute to the literature by showing that in addition to increasing household income, migration enhances subjective well-being and satisfaction with freedom. The results are robust to sensitivity checks. Understanding the causal effects of migration on perceived and actual well-being is crucial for an informed public policy debate and has direct implications for social cohesion and integration policy.
    Journal of Economic Behavior & Organization 10/2014; 112. DOI:10.1016/j.jebo.2015.02.003 · 1.01 Impact Factor
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    • "Further, in documenting a robust positive impact of improved financial sector efficiency on the selection of emigrants, we identify a potential second order impact of financial reform on economic growth, namely, through the creation of skilled diasporas. Finally, in addressing the interplay of financial liberalization with the institutional structure of an economy, it contributes to the literature on institutional determinants of skilled migration (Bang and Mitra, 2011; Bertocchi and Strozzi, 2008). The paper is organized as follows: Section 2 presents the conceptual foundations of our analysis and a brief review of the relevant literature; Section 3 introduces the data; Section 4 outlines the methodological concerns and our responses to them; Section 5 reports our results; and Section 6 concludes. "
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    ABSTRACT: This paper explores the impact of financial liberalization on the migration of high skilled labor from 46 countries to the OECD, taken at five year intervals over the period 1985-2000. Using an exploratory factor analysis, we are able to distinguish between two dimensions of financial liberalization, namely the robustness of the markets and their freedom from direct government control. We find that a standard deviation improvement in the robustness of the source country financial sector magnifies the extent of brain drain by a factor of about four percentage points on the average. However, a corresponding increase in the freedom of the source country financial sector from government control has a modest negative impact on the emigration of high skilled labor and the effect is not statistically significant. Further, the impact of improved financial sector robustness on selection is more pronounced for non-OECD economies than for OECD nations, which experience virtually no impact on skilled emigration.
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