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The Causes and Effects of International Labor Mobility: Evidence from OECD Countries 1980-2005

Author

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  • Francesc Ortega

    () (Department of Economics and Business, Universitat Pompeu Fabra, Barcelona, Spain)

  • Giovanni Peri

    () (Department of Economics, University of California, Davis and NBER)

Abstract

This paper contains three important contributions to the literature on international migrations. First, it compiles a new dataset on migration flows and stocks and on immigration laws for 14 OECD destination countries and 74 sending countries for each year over the period 1980-2005. Second, it extends the empirical model of migration choice across multiple destinations, developed by Grogger and Hanson (2008), by allowing for unobserved individual heterogeneity between migrants and non-migrants. We use the model to derive a pseudo-gravity empirical specification of the economic and legal determinants of international migration. Our estimates show that bilateral migration flows are increasing in the income per capita gap between origin and destination. We also find that bilateral flows decrease significantly when the destination countries adopt stricter immigration laws. Third, we estimate the impact of immigration flows on employment, investment and productivity in the receiving OECD countries using as instruments the ”push” factors only in the gravity equation. We find that immigration increases employment one for one, implying no crowding-out of natives. In addition, investment responds rapidly and vigorously, and total factor productivity is not affected. These results imply that immigration increases the total GDP of the receiving country in the short-run one-for-one, without affecting average wages or labor productivity. We also find that the effects of immigration are less beneficial when the receiving economy is in bad economic times.

Suggested Citation

  • Francesc Ortega & Giovanni Peri, 2009. "The Causes and Effects of International Labor Mobility: Evidence from OECD Countries 1980-2005," Human Development Research Papers (2009 to present) HDRP-2009-06, Human Development Report Office (HDRO), United Nations Development Programme (UNDP), revised Apr 2009.
  • Handle: RePEc:hdr:papers:hdrp-2009-06
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    References listed on IDEAS

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    Cited by:

    1. Bodart, Vincent & Carpantier, Jean-François, 2016. "Real exchange rates and skills," Journal of International Money and Finance, Elsevier, vol. 67(C), pages 305-319.
    2. Docquier, Frédéric & Rapoport, Hillel & Salomone, Sara, 2012. "Remittances, migrants' education and immigration policy: Theory and evidence from bilateral data," Regional Science and Urban Economics, Elsevier, vol. 42(5), pages 817-828.
    3. Nicola Gennaioli & Rafael La Porta & Florencio Lopez De Silanes & Andrei Shleifer, 2014. "Growth in regions," Journal of Economic Growth, Springer, vol. 19(3), pages 259-309, September.
      • Nicola Gennaioli & Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer, "undated". "Growth in Regions," Working Paper 73436, Harvard University OpenScholar.
      • Nicola Gennaioli & Rafael La Porta & Florencio Lopez de Silanes & Andrei Shleifer, 2013. "Growth in Regions," NBER Working Papers 18937, National Bureau of Economic Research, Inc.
    4. Frédéric Docquier & Hillel Rapoport, 2012. "Globalization, Brain Drain, and Development," Journal of Economic Literature, American Economic Association, vol. 50(3), pages 681-730, September.
    5. repec:spr:epolit:v:34:y:2017:i:3:d:10.1007_s40888-017-0064-4 is not listed on IDEAS
    6. Bertoli, S. & Fernández-Huertas Moraga, J. & Ortega, F., 2013. "Crossing the border: Self-selection, earnings and individual migration decisions," Journal of Development Economics, Elsevier, vol. 101(C), pages 75-91.
    7. Christopher Parsons, "undated". "Do Migrants Really Foster Trade? The Trade-Migration Nexus, a Panel Approach 1960-2000," Discussion Papers 11/10, University of Nottingham, GEP.
    8. Aubry, Amandine & Burzyński, Michał & Docquier, Frédéric, 2016. "The welfare impact of global migration in OECD countries," Journal of International Economics, Elsevier, vol. 101(C), pages 1-21.
    9. Matteo Gomellini & Cormac O' Grada, 2011. "Outward and Inward Migrations in Italy: A Historical Perspective," Quaderni di storia economica (Economic History Working Papers) 08, Bank of Italy, Economic Research and International Relations Area.
    10. Ekrame Boubtane & Jean-Christophe Dumont & Christophe Rault, 2016. "Immigration and economic growth in the OECD countries 1986–2006," Oxford Economic Papers, Oxford University Press, vol. 68(2), pages 340-360.
    11. Marchiori, Luca & Maystadt, Jean-François & Schumacher, Ingmar, 2012. "The impact of weather anomalies on migration in sub-Saharan Africa," Journal of Environmental Economics and Management, Elsevier, pages 355-374.
    12. repec:eee:wdevel:v:95:y:2017:i:c:p:141-163 is not listed on IDEAS
    13. Nikolova, Milena & Graham, Carol, 2015. "In transit: The well-being of migrants from transition and post-transition countries," Journal of Economic Behavior & Organization, Elsevier, vol. 112(C), pages 164-186.
    14. de Oliveira André Rossi & Wooster Rossitza B., 2015. "Economic Sector Choices of Mexican Migrants to the USA: Evidence from the 2011 EMIF Border Survey," Global Economy Journal, De Gruyter, vol. 15(1), pages 25-50, March.
    15. Spiros Bougheas & Douglas R. Nelson, 2012. "Skilled Worker Migration and Trade: Inequality and Welfare," The World Economy, Wiley Blackwell, vol. 35(2), pages 197-215, February.
    16. Aparicio Fenoll, Ainhoa & Kuehn, Zoë, 2016. "Education Policies and Migration across European Countries," IZA Discussion Papers 9755, Institute for the Study of Labor (IZA).
    17. repec:dau:papers:123456789/5382 is not listed on IDEAS
    18. Wilson, E. J. & Jayanthakumaran, K. & Verma, R., 2012. "Demographics, Labor Mobility, and Productivity," ADBI Working Papers 387, Asian Development Bank Institute.
    19. Hathroubi, Salem & Aloui, Chaker, 2016. "On interactions between remittance outflows and Saudi Arabian macroeconomy: New evidence from wavelets," Economic Modelling, Elsevier, vol. 59(C), pages 32-45.
    20. Ivan Etzo & Carla Massidda & Paolo Mattana & Romano Piras, 2017. "The impact of immigration on output and its components: a sectoral analysis for Italy at regional level," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 34(3), pages 533-564, December.
    21. Rayp, Glenn & Ruyssen, Ilse & Standaert, Samuel, 2017. "Measuring and Explaining Cross-Country Immigration Policies," World Development, Elsevier, pages 141-163.
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    23. Ratha, Dilip & Mohapatra, Sanket & Scheja, Elina, 2011. "Impact of migration on economic and social development : a review of evidence and emerging issues," Policy Research Working Paper Series 5558, The World Bank.
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    More about this item

    Keywords

    International Migration; Push and Pull factors; Migration costs; Employment; Investment; Productivity;

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • J0 - Labor and Demographic Economics - - General
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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