Journal Issue: World Bank Economic Review, Volume 32, Issue 1

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The Long-term Impacts of International Migration: Evidence from a Lottery
(Published by Oxford University Press on behalf of the World Bank, 2018-02-01) Gibson, John ; McKenzie, David ; Rohorua, Halahingano ; Stillman, Steven
We examine the long-term impacts of international migration by comparing immigrants who had successful ballot entries in a migration lottery program, and first moved almost a decade ago, with people who had unsuccessful entries into those same ballots. The long-term gain in income is found to be similar in magnitude to the gain in the first year despite migrants upgrading their education and changing their locations and occupations. This results in large sustained benefits to their immediate family who have substantially higher consumption, durable asset ownership, savings, and dietary diversity. In contrast we find no measurable impact on extended family.
How and Why Does Immigration Affect Crime? Evidence from Malaysia
(Published by Oxford University Press on behalf of the World Bank, 2018-02-01) Ozden, Caglar ; Testaverde, Mauro ; Wagner, Mathis
The perception that immigration fuels crime is an important source of anti-immigrant sentiment. Using Malaysian data for 2003-10, this paper provides estimates of the overall impact of economic immigration on crime, and evidence on different socio-economic mechanisms underpinning this relationship. The IV estimates suggest that immigration decreases crime rates, with an elasticity of around −0.97 for property and -1.8 violent crimes. Three-quarters of the negative causal relationship between immigration and property crime rates can be explained by the impact of immigration on the underlying economic environment faced by natives. The reduction in violent crime rates is less readily explained by these factors.
Migrant Labor Markets and the Welfare of Rural Households in the Developing World: Evidence from China
(Published by Oxford University Press on behalf of the World Bank, 2018-02-01) de Brauw, Alan ; Giles, John
Increased ability to migrate from China’s rural villages contributed to significant increases in the consumption per capita of both non-durable and durable goods, and these effects were larger in magnitude for households that were relatively poor before the easing of restrictions to migration. With increased out-migration, poorer households invested more in housing and durable goods than rich households,while richer households invested significantly more in non-agricultural production assets. As migration became easier, increased participation in migrant employment was greater among poorer households on both the extensive and intensive margins, and poorer households reduced labor days in agriculture.
Can Parental Migration Reduce Petty Corruption in Education?
(Published by Oxford University Press on behalf of the World Bank, 2018-02-01) Höckel, Lisa Sofie ; Santos Silva, Manuel ; Stöhr, Tobias
The income generated from parental migration can increase funds available for children’s education. In countries where informal payments to teachers are common migration could therefore increase petty corruption in education. To test this hypothesis, we investigate the effect of migration on educational inputs. We use an instrumental variables approach on survey data and matched administrative records from the World Bank’s Open Budget Initiative (BOOST) from Moldova, one of the countries with the highest emigration rates. Contrary to the positive income effect, we find that the strongest migration-related response in private education expenditure is a substantial decrease in informal payments to public school teachers. Any positive income effect due to migration must hence be overcompensated by some payment-reducing effects. We discuss a number of potential explanations at the family level, school level or community level. We furthermore rule out several of these explanations and highlight possible interpretations for future research.
Migrant Remittances and Information Flows: Evidence from a Field Experiment
(Published by Oxford University Press on behalf of the World Bank, 2018-02-01) Batista, Catia ; Narciso, Gaia
Do information flows matter for remittance behavior? We design and implement a randomized control trial to quantitatively assess the role of communication between migrants and their international network on the extent and value of remittance flows. In the experiment, a random sample of 1,500 migrants residing in Ireland was offered the possibility of contacting their networks outside the host country for free over a varying number of months. We find a sizeable positive impact of our intervention on the value of migrant remittances sent. Larger remittance responses are associated with individuals who are employed and earn higher incomes. This evidence is consistent with the idea that the observed increase in remittances is not a consequence of relaxed budget constraints due to subsidized communication costs but rather a likely result of improved information, perhaps due to better migrant control over remittance use, enhanced trust in remittance channels due to experience sharing, or increased remittance recipients’ social pressure on migrants.
The Impact of the Syrian Refugee Crisis on Firm Entry and Performance in Turkey
(Published by Oxford University Press on behalf of the World Bank, 2018-02-01) Akgündüz, Yusuf Emre ; van den Berg, Marcel ; Hassink, Wolter
We analyze how the Syrian refugee inflows into Turkey affected firm entry and performance. To estimate the causal effects, we use instrumental variables, difference-in-differences, and synthetic control methodologies. The results suggest that hosting refugees is favorable for firms. Total firm entry does not seem to be significantly affected. However, there is a substantial increase in the number of new foreign-owned firms. In line with the increase in new foreign-owned firms, there is some indication of growth in gross profits and net sales.
Inventor Diasporas and the Internationalization of Technology
(Published by Oxford University Press on behalf of the World Bank, 2018-02-01) Miguelez, Ernest
This paper documents the influence of diaspora networks of highly-skilled individuals—that is, inventors—on international technological collaborations. Using gravity models, it studies the determinants of the internationalization of inventive activity between a group of industrialized countries and a sample of developing and emerging economies. The paper examines the influence exerted by skilled diasporas in fostering cross-country co-inventorship as well as R&D offshoring. The study finds a strong and robust relationship between inventor diasporas and different forms of international co-patenting. However, the effect decreases with the level of formality of the interactions. Interestingly, some of the most successful diasporas recently documented—namely, Chinese and Indian ones—do not govern the results.
The Impact of Rural Pensions in China on Labor Migration
(Published by Oxford University Press on behalf of the World Bank, 2018-02-01) Eggleston, Karen ; Sun, Ang ; Zhan, Zhaoguo
We study the impact of China’s new rural pension program on promoting migration of labor by applying a regression discontinuity analysis to this new pension program. The results reveal a perceptible difference in labor migration among adult children whose parents are just above and below the age of pension eligibility: The adult children with a parent just attaining the pension-eligible age are more likely to be labor migrants compared with those with a parent just below the pension-eligible age. We also find that with a pension-eligible parent, the adult children are more likely to have off-farm jobs. These abrupt changes in household behavior at the cutoff suggest that these households are credit constrained. In addition, we find that the pension’s effect on migration is greater among adult children with a parent in poor health; pension-eligible elderly report that they are more likely to use inpatient services when needed and less likely to rely on adult children for care when they are ill. These results suggest that (expectations regarding) providing care for elderly parents has constrained labor migration from China's rural areas to some extent, and that the new rural pension program has helped to relax this constraint.
When the Cat’s Away ... The Effects of Spousal Migration on Investments on Children
(Published by Oxford University Press on behalf of the World Bank, 2018-02-01) Rizzica, Lucia
Household expenditures for children-related goods may change when one of the parent migrates and do so differently depending on whether it is the mother or the father that leaves. A sequential model that explains migration and budget allocation choices is proposed and its predictions are tested on data from Indonesia. Selection of households into female migration is accounted for using a set of instrumental variables derived from the model. Results show that when children are left with fathers, the household budget is significantly diverted toward the purchase of adult private goods, but the share of budget devoted to children remains unaffected because mothers compensate by giving up their own private consumption and sending home more remittances.
Migration and Cross-Border Financial Flows
(Published by Oxford University Press on behalf of the World Bank, 2018-02-01) Kugler, Maurice ; Levintal, Oren ; Rapoport, Hillel
Migration facilitates the flow of information between countries, thereby reducing informational frictions that potentially hamper cross-country financial flows. Using a gravity model, migration is found to be highly correlated with financial flows from the migrant’s host country to her home country. The correlation is strongest where information problems are more acute (e.g., between culturally more distant countries), for asset types that are more informational sensitive, and for the type of migrants that are most able to enhance the flow of information on their home countries, namely, skilled migrants. These differential effects are interpreted as evidence for the role of migration in reducing information frictions between countries.
Heterogeneous Technology Diffusion and Ricardian Trade Patterns
(Published by Oxford University Press on behalf of the World Bank, 2018-02-01) Kerr, William R.
Migration and trade are often linked through ethnic networks boosting bilateral trade. This study uses migration to quantify the importance of Ricardian technology differences for international trade. The framework provides the first panel estimates connecting country-industry productivity and exports, and the study exploits heterogeneous technology diffusion from immigrant communities in the United States for identification. The latter instruments are developed by combining panel variation on the development of new technologies across US cities with historical settlement patterns for migrants from countries. The instrumented elasticity of export growth on the intensive margin with respect to the exporter’s productivity growth is between 1.6 and 2.4, depending upon weighting. This provides an important contribution to the trade literature of Ricardian advantages, and it establishes a connection of migration to home country exports beyond bilateral networks.