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Immigration, remittances and business cycles

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  • Mandelman, Federico S.
  • Zlate, Andrei

Abstract

Using data on border enforcement and macroeconomic indicators from the U.S. and Mexico, we estimate a two-country business cycle model of labor migration and remittances. The model matches the cyclical dynamics of unskilled migration, and documents the insurance role of remittances in consumption smoothing. Over the cycle, immigration increases with the expected stream of future wage gains, but it is dampened by a sunk emigration cost. Migration barriers slow the adjustment of the stock of immigrant labor, enhancing the volatility of unskilled wages and remittances. Changes in border enforcement have asymmetric welfare implications for the skilled and unskilled households.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 59 (2012)
Issue (Month): 2 ()
Pages: 196-213

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Handle: RePEc:eee:moneco:v:59:y:2012:i:2:p:196-213

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Web page: http://www.elsevier.com/locate/inca/505566

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Citations

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Cited by:
  1. Federico Mandelman, 2013. "Labor Market Polarization and International Macroeconomic Dynamics," 2013 Meeting Papers 291, Society for Economic Dynamics.
  2. Nicole B. Simpson & Chad Sparber, 2013. "The Short- and Long-Run Determinants of Less-Educated Immigrant Flows into U.S. States," Southern Economic Journal, Southern Economic Association, vol. 80(2), pages 414-438, October.
  3. Ibrahim Sirkeci & Jeffrey H. Cohen & Dilip Ratha, 2012. "Migration and Remittances during the Global Financial Crisis and Beyond," World Bank Publications, The World Bank, number 13092, August.
  4. Ahmed, Junaid & Martinez-Zarzoso, Inmaculada, 2013. "Blessing or curse: The stabilizing role of remittances, foreign aid and FDI to Pakistan," Center for European, Governance and Economic Development Research Discussion Papers 153, University of Goettingen, Department of Economics.
  5. Simpson, Nicole B. & Sparber, Chad, 2012. "The Short- and Long-Run Determinants of Less-Educated Immigration into U.S. States," IZA Discussion Papers 6437, Institute for the Study of Labor (IZA).
  6. Peter Claeys & Luis Costa, 2012. "“A Note on the Relationship Between the Cyclicality of Markups and Fiscal Policy”," AQR Working Papers 201208, University of Barcelona, Regional Quantitative Analysis Group, revised Sep 2012.
  7. Simpson, Nicole & Sparber, Chad, 2010. "The Short-and Long-Run Determinants of Unskilled Immigration into US States," Working Papers 2010-06, Department of Economics, Colgate University.
  8. Garcia, Pablo M & Rodriguez-Montemayor, Eduardo, 2010. "A primer of international migration: The Latin American experience and a proposal for a research agenda," MPRA Paper 24147, University Library of Munich, Germany.
  9. Andrei Zlate & Federico Mandelman, 2013. "Offshoring, Low-skilled Immigration and Labor Market Polarization," 2013 Meeting Papers 1073, Society for Economic Dynamics.
  10. Alexis Antoniades & Ganesh Seshan & Roberto A. Weber & Robertas Zubrickas, 2013. "On altruism and remittances," ECON - Working Papers 131, Department of Economics - University of Zurich.
  11. Maroula Khraiche, 2009. "Trade, Firm Structure, and Migration of Talent," Working papers 2009-35, University of Connecticut, Department of Economics.

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