Deck 1: Why Study the Economics of Immigration

Question 1

What are the main reasons people migrate? What factors are likely to influence how many people migrate and their reasons for migrating?

Answer 1

Many voluntary migrants move for economic reasons, such as expectations of getting a better job and earning more. Most economic migrants are influenced by the difference between labor market opportunities at home and abroad. Receiving education in another country is also an important motivation for some migrants. Other voluntary migrants move to join family members. The costs of migration, including transportation and administrative fees, affect the number of voluntary migrants. Higher costs reduce the number of voluntary migrants, all else equal.
Involuntary migrants include refugees and asylum seekers as well as some victims of trafficking. Refugees and asylum seekers migrate to escape persecution because of politics, gender, religion, ethnicity, etc., violent conflict or natural disasters. The prevalence of these events influences the number of people seeking refuge in more-stable countries.
For both voluntary and involuntary migrants, migration policy affects the number of people migrating to a particular country. Stricter immigration policy in receiving countries reduces the number of migrants, but it can also lead to some people becoming unauthorized immigrants instead of legal ones.

Question 2

What factors are likely to influence immigrants' choice of destinations?

Answer 2

Push factors and pull factors influence immigrants' choice of destinations. Push factors in the origin country may include a weak economy, war, violent conflict, poverty, natural disasters, ethnic discrimination, political turmoil and religious persecution. Pull factors in the destination country can include better labor market opportunities, higher wages, social/ethnic networks, family ties, political stability and safety.

Question 3

What types of immigrants are likely to go to low-income, developing countries, and what types of immigrants are likely to go to high-income, industrialized countries?

Answer 3

Refugees and asylum seekers are more likely to go to low-income, developing countries. Even a low-income country may be better than their current situation. Additionally, people from a very low-income country who are not able to migrate to a high-income country may choose to move to a slightly less low-income country to improve their circumstances. They also may be closer to a low-income, developing country than to a high-income, industrialized country or have a bigger network in another low-income, developing country.
Skilled immigrants are more likely than less-skilled immigrants to go to low-income, industrialized countries, as are wealthier immigrants who are better able to afford the costs of migrating longer distances. Skilled immigrants are more likely than less-skilled immigrants to qualify for a visa for many countries.
Victims of human trafficking are brought to both types of countries.

Question 4

How would the effects of migration on employment and wages in the destination and origin countries be different from Figure 1.1 if labor supply is responsive to wages (the labor supply curves are upward-sloping instead of vertical)? What if labor demand is not responsive to wages (the labor demand curves are vertical)?

Question 5

What types of barriers to immigration or emigration might a country impose, and why? What are the likely economic effects of such barriers?

Question 6

Describe an interesting migration flow. Do some research on that migration flow. Why did these people leave their home country? How many migrated? Was the migration temporary or permanent?

Question 7

Web exercise: Using the Web, create a list of countries with jus soli and jus sanguinis citizenship policies. Do you see any patterns?

Question 8

Web exercise: Using Gallup's Potential Net Migration Index, available at https://news.gallup.com/migration/interactive.aspx, list the top and bottom five countries in terms of potential net migration index. Is there any pattern to those lists? Also, find your country's index and speculate on what you think underlies that number.

Question 9

How is a highly compensated professional who already works long hours likely to respond to an increase in the hourly wage? How would a young adult who earns little anddoesn't have a full-time job respond? For each, which effect is likely to dominate, the income effect or the substitution effect?

Question 10

Does an increase in labor demand have a larger or smaller effect on wages and the number of workers as the elasticity of labor supply increases? Include a clearly labelled diagram as part of your answer.

Question 11

How does an increase in supply affect consumer surplus and producer surplus? Include a clearly labelled diagram as part of your answer.

Question 12

What happens to the present value as the future value decreases? As the interest rate decreases? And as the length of time until the future value occurs decreases? (For each change, assume the other variables do not change.)

Question 13

Suppose a worker can earn $1000 more each year by moving to another country. What is the present value of the income gains over three years if the interest rate is 10 percent?