capitulo 6 economics of migration, Transcripciones de Computación Gráfica y Animación

¡Descarga capitulo 6 economics of migration y más Transcripciones en PDF de Computación Gráfica y Animación solo en Docsity! 4 Selection in Immigration In economic models of the migration decision, cross-country differences in economic conditions play a central role in determining whether people move. The utility- or income-maximization model and the gravity model predict that changes in relative economic conditions lead to changes in migration flows. Chapters 2 and 3 focused on how changes in relative economic conditions affect the number of people who migrate. This chapter focuses on how changes in relative economic conditions affect the composition, or characteristics, of immigrants. Immi- grants are unlikely to be perfectly representative of the population in the origin. They may be predominately high skilled or predominately low skilled. They may be disproportionately workers, students, children, stay-at-home spouses or retirees. Who chooses to migrate is often as important to both origin and destination countries as the number of migrants. Origin and destination countries can have many different perspectives on what characteristics are “desirable” among migrants, These perspectives may or may not con- flict. For example, origin countries may be concerned that out-migration of skilled workers will slow economic growth, while destination countries may want to attract skilled workers in order to boost economic growth. Origin countries may want students to go abroad to receive an education but then return home to contribute to the economy. Destination countries may want to attract tuition-paying foreign students and then have them leave so that they do not compete with native-born workers. Alternatively, destination countries may not want to incur the cost of educating foreign students unless they will stay and join the workforce. The economics of immigration uses selection models to look at immigrants” characteristics. Studies of immigrant selection have focused primarily on the relationship between immi- grants” skill levels and returns to skill in the origin and destination. This chapter therefore focuses on skill. However, the model presented in this chapter can be applied to other char- acteristics as well. The key prediction of the model is that immigrants” characteristics depend on the relative returns to those characteristics. The model can also be applied to return migra- tion, as discussed later in this chapter. The selection model can explain why not all migrants from an origin country go to the same destination country. People in the same country typically share a culture and language, and they are about the same distance from other countries. So why do some migrants go to one place while others go elsewhere? The selection model developed below predicts that people sort across potential destinations —including the origin—based on their skills and the relative returns to those skills. 80 Immigrant Selection and Assimilation The Roy model The economist George Borjas (1987) developed an influential model of skill selection in immigration. The model is based on a canonical model by Andrew Roy (1951) that examined how self-selection into occupations affects the distribution of income. In Borjas's version of. the Roy model, workers earn the average wage in their country plus a random term. The aver- age wage differs across countries, as does the distribution of the random term. In the origin country, the distribution of wages is In(Wage) = 4 +€ (4.1) where y is the average wage and € is a measure of how much wages vary across individuals rel- ative to the average. (The model examines the natural log of wages because logarithmic func- tions have nice properties that the model exploits.) People with positive values of € earn more than the average, while people with negative values of £ earn less than the average. One way to interpret € is as measuring the return to skill-——how much wages increase as skill increases. The model assumes that € is distributed normally with a mean of O and a variance of O”. (Borjas makes this assumption because normal distributions also have nice properties that the model exploits.) The larger 0? is, or the bigger the variation in €, the higher the return to skills is in the origin country and the greater income inequality is there. As the variation in income increases, income inequality grows. If everyone in the origin country migrates to the destination country, their distribution of wages in the destination country is In(ioge)=(1+6 (4.2) where E is distributed normally with a mean of 0 and a variance of O? (terms with a tilde (=) over them refer to the destination country, and terms without it refer to the origin country). Everyone knows |, fl and the cost of migrating, and people know their own € and É. The model assumes that € and É are correlated with, or related to, each other, with a correlation coefficient equal to p. This correlation coefficient can range from 1 to —1. Bigger numbers in absolute value mean a stronger relationship between earnings in the origin and the destination. If P is positive, then people who have higher-than-average earnings in the origin also have higher-than-average earnings in the destination, and people with lower-than-average earnings in the origin have lower-than-average earnings in the destination. This would occur il skills that are valuable in the origin are also valuable in the destination. For example, an engi- neer in Kenya who has a PhD is likely to earn an above-average wage in Kenya and elsewhere, while a street cleaner from India who has no formal education is likely to earn a below-average wage in India and elsewhere. The more similar two countries are, the higher P is likely to be. If p is negative, then people who have higher-than-average earnings in the origin have lower- than-average earnings in the destination. For example, people who are relatively successful in an agricultural economy that rewards physical strength and stamina might be relatively unsuc- cessful in an industrialized economy that values education. The correlation coefficient may be negative for immigrants moving from some developing countries to industrialized countries.  Selection in Immigration 83 inequality decreases in the origin relative to the destination, immigration increases ¡es less negatively selected. But if income inequality increases further in the origin to the destination, immigration decreases and becomes even more negatively selected. 4.2 shows how the relative return to skill affects the direction of selection. Wages 'ed to increase linearly with skill, and skill is perfectly transferable across countries = 1).The steepness of the skill-wage profile indicates the return to skill in a country-— the line, the higher the return to skill. In Figure 4.2(a) on the left, the return to higher in the destination than in the origin. The opposite is the case in Figure 4.2(b) on the return to skill is higher in the destination than in the origin, people with low earn more in the origin than in the destination, and people with high skill levels in the destination than in the origin. In Figure 4.2(a), everyone whose skill level s*, the skill level at which the lines cross, stays in the origin, while everyone with a skill level migrates. In Figure 4.2(b), everyone whose skill level is below s* migrates, ne with a higher skill level stays. effect of changes in the relative return to skill can be seen by pivoting one of the skill— in either figure while leaving the other line unchanged. For example, an increase relative return to skill in the destination causes the dashed skill-wage lines to steepen, 4.3(a) shows. The skill threshold for migrating versus staying, s*, then changes, and of immigrants changes as a result, If immigrants are positively selected and the return to skill in the destination increases, the skill threshold for migrating falls. More migrate, and migration becomes less selective as a result. Note that the direction of changes only if the change in the relative return to skill is so large that the country iously had the lower return to skill now has the higher return to skill, and vice versa. effect ofa change in average income in the origin or the destination can be seen by shift- of the skill -wage lines up or down in cither figure while again leaving the other line (a) Positive selection (b) Negative selection Skill Ss Skill Figure 4.2 Relative returns to skill and the direction of selection. (2), positive selection occurs because the return to skill is higher in the destination than in the origin, as icated by a more stecply sloped skill-wage curve in the destination (the dashed line) than in the origin the solid line). In (b), negative selection occurs because the return to skill is higher in the origin than in the tion, as indicated by a more stecply sloped skill -wage curve in the origin (the solid line) than in the destination (the dashed line). 84 — Immigrant Selection and Assimilation (a) Increase in the return to skill (b) Increase in average income Wage Wage O Skill e s Skill Figure 4.3 The effect of changes in the relative return to skill or average income in the destinati In (a), an increase in the relative return to skill in the destination decreases the skill threshold for mi if there is already positive selection. More people migrate, and migration becomes less positively sel In (b), an increase in the average wage in the destination decreases the skill threshold for migrating. unchanged. An increase in the average wage in the destination causes the dashed skilla line to shift up in Figure 4.3(b), for example. A change in average income does not affect direction of selection, but it does change the magnitude of immigration and, by changing the skill level of the marginal immigrant and the average immigrant. If there is already tive selection, the skill threshold for migrating falls and more people migrate. Migration becomes less selective in this case, as Figure 4.3(b) shows. The effect of a change in migration costs can also be seen by shifting one of the lines. example, an increase in migration costs is effectively a lower wage at all skill levels in the tination, or a downwards shift in the skill-wage line for the destination. Refugees and selection Borjas discusses a third type of selection, when immigrants are from the low end of the distribution in the origin but are in the upper end of the wage distribution in the desti country. This is particularly likely to happen when P is negative. Borjas terms this “refugee ing” or “inverse sorting” and argues that this case is particularly likely for migration from tries that adopt a Communist or Socialist government that confiscates privately owned When such transitions occurred in Eastern Europe, Cuba and parts of Latin America during: twentieth century, many highly skilled people whose prospects at home worsened mi Those migrants typically were successful in the market-oriented economies of their desti However, not all refugees are successful. Many have low skill levels and do poorly in the origin and the destination. If they are doing well in the origin, they have little re: flee. Refugees may be negatively selected relative to the destination if they would not mi absent some adverse event, such as a natural disaster or a civil war. Because their migrati not motivated by potential economic gains, they are unlikely to be selected on characteri that are valued in the destination. Refugees also may have little choice of destination co Selection in Immigration 85 but simply flee to the nearest safe country or to a country that will take them, not necessarily country in which they will be the most successful. Ultimately, the direction of selection nong refugees depends on the nature of the refugee-producing event and other idiosyncratic ctors (Chin and Cortes, 2014). mediate selection migration costs depend on skill, intermediate selection may occur instead of positive or gative selection. Intermediate selection is when immigrants are from the middle of the skill d wage) distribution. Suppose the return to skill is higher in the origin than in the destina- as in Figure 4.2(b). If all immigrants have the same migration costs, negative selection curs. But if migration costs decrease as skill increases, intermediate selection may occur cad. Low-skilled people have bigger gains from migrating but also higher migration costs people with more skill. Low-skilled people therefore may not benefit from migrating. aple with intermediate skill levels may benefit from migrating from a country with rela- ely high inequality because their migration costs are lower than for low-skilled people. here are several reasons why migration costs might decrease as skill increases. People with skill levels and hence low incomes may face “cash-in-advance” or liquidity constraints, tions where they cannot save or borrow enough to pay the costs of migrating. Such con- is may not be binding for people with higher skill levels and hence higher incomes. gration policies that favor skilled migrants may make migration costs lower for skilled s than for unskilled migrants. In addition, migrant networks may increase with skill. ration costs then would decrease as skill increases since having a bigger migrant network ces migration costs, all else equal. gration costs instead increase with skill, intermediate selection may occur from coun- with relatively low inequality. Intermediate selection might occur if an origin country relative low inequality imposes highly progressive taxes—tax rates that increase with on emigrants, for example. In that case, high-skilled, high-income people may stay er to avoid paying high taxes if they emigrate. selection model applies to selection on both observable characteristics and unobservable . Education and income are examples of observable characteristics. Unobserv- eristics are, by definition, characteristics that datasets do not include since they are able or easily quantified by researchers. Ambition and willingness to work hard are es of unobservable characteristics. Economists usually measure unobservable character- estimating wage models. The residual, or error term, after controlling for observable ics serves as a measure of unobservable characteristics. Selection on observable and ble characteristics is usually in the same direction, although not always. ng up the model Hlection model has two key insights. First, the number of immigrants depends not only ive incomes in the origin and the destination but also on the variances of those incomes, relative return to skill. Second, not just the number of immigrants but also their com- heir skill level—depend on the relative return to skill. In essence, less-skilled 88 Immigrant Selection and Assimilation 5 + Guyana Haiti q Barbados, e . » Zimbabwe * a * E e». Papua New Guine4 + .t e Log odds of emigration for tertiary educated . «é e sor. ys 1 . osio UI e lreland ARAN Mexico a: $ 3 > E * Slovenia e ¿eye anal runs e ose +. *Z *Australia pana. Le *+ Kazakhstan .. 54 0. + United States + *Russia Turkmenistan 7 3 9 7 5 3 E] 1 3 5 Log odds of emigration for primary educated Figure 4.4 Emigration rates for adults by source country and education, 2010. Source: Emigration rate from Briicker, H., Capuano, S., Marfoulk, A. (2013) “Education, gender international migration: Insights roma panel-datasct 1980-2010 "Available at http: / /www.iab.de/en/d: iab-brain-drain-data.aspx [12 December 2013]. The data include adults age 25 and older. Like the United States, Russia and Turkmenistan have higher returns to skill than most the twenty OECD destination countries included in the data used here and are below 45” line in Figure 4.4. Mexico is also below the 45” line, although closer to it than Rus Turkmenistan and the United States. It is difficult to use Figure 4.4 to draw clear conclusions about the validity of the selectis model. On the one hand, the fact that most immigrants are positively selected seems at with the selection model. We should observe a mix, with countries with relatively low retu to skill above the 45” line and countries with relatively high returns to skill below the 45" li On the other hand, the data combine 20 destination countries, some of which have hi returns to skill than many origin countries and some of which have lower returns to Looking at a single destination country may therefore be more useful. Figure 4.5 looks at selection among immigrants to a single country, the United Sta The horizontal axis in the figure is the ratio of earnings of workers with a tertiary educ tion to workers with only a primary education in 31 countries. This ratio is a proxy for return to skill. The vertical axis is the natural log of the ratio of the emigration rate to United States among adults with a tertiary education to the emigration rate among ad: with a primary education for those 31 origin countries. The selection model predicts the figure should show a negative relationship—+the more high-skilled workers earn relati to low-skilled workers in the origin country, the lower the emigration rate should be am: Selection in Immigration 89 > 3 E + Turkey Pas + Switzerland Al 3 3 Darpiad + United Kingdom 3 «Finland New Zealand, + Franco 25 "+ Sweden A E ó + Norway *Belgium +Chile > pe Israel 2 .s «Slovakia , E 15 Spain "Netheriands - + Luxembourg ñ «Ireland 4 8 *Korea 3 «Germany «Italy + Portugal ESO Australia + Hungary 0.5 + Greece E + Canada Eze, 1 15 2 25 3 3.5 4 45 5 Earnings of tertiary-educated workers/earnings of primary-educated workers Figure 4.5 Relative carnings and emigration rates to United States for tertiary- and primary- educated adults, by origin country. Source: Emigration rate from Briicker, H., Capuano, S. and Marfoulk, A. (2013) “Education, gender and inter- national migration: Insights from a panel-dataset 1980-2010.” Available at http: / /www.iab.de/en/daten/iab- brain-drain-data.aspx [12 December 2013]; carnings data from table A6.1 of OECD (2013) Education at a Glance 2013. Available at: http://www.oecd.org/edu/cag2013%20(eng)--FINAL%2020%20June%20 2013.pdf [19 March 2014]. illed workers relative to low-skilled workers. However, this is not the case. Statisti- there is not a relationship between the return to skill and the emigration rate among origin countries. 'e early research finds results that appear consistent with the selection model. For le, Borjas (1987) analyzes data on male immigrants from 41 countries to the United He concludes that male immigrants” wages are negatively related to income inequality ir origin country, as measured by the 90/20 income share. This finding is consistent with selection model. However, the finding is sensitive to what other variables are included in lel. Deborah Cobb-Clark (1993) applies Borjas's approach to female immigrants from tries to the United States. She similarly finds that immigrants” wages tend to be neg- related to income inequality, as measured by the 95/20 income share. She also finds immigrants” wages may be negatively related to the return to schooling in their origin ; as measured by the return to completing secondary education (high school). These are again consistent with the selection model but sensitive to what other variables are in the model. studies of the selection model were hampered by data limitations. Testing the selec- model requires data on the returns to skill in the origin and in the destination and data on ion rates by skill level. Early studies had proxies for the rates of return to skill in the and destination and data on the characteristics of immigrants, but they lacked data on  90 — Immigrant Selection and Assimilation people who did not migrate. Early studies therefore examined the relationship between ti average skill level of immigrants from a country and the relative rate of return to skill. relationship is not a true test of the selection model because it says nothing about the skills immigrants relative to the population of the origin country. For example, an immigrant developing country might look low skilled compared with a U.S. native or an immigrant an industrialized country but might be from the top portion of the developing country's ski distribution. Early studies were also limited to examining only one or a handful of destinati countries. In recent years, the Internet and faster computers have allowed researchers to use bet data. Frédéric Docquier, Abdeslam Marfouk and colleagues led the way by creating esti of emigration rates by education from a large number of origin countries to OECD desti tion countries. Such estimates allow researchers to better test the validity of the selecti model, The results provide support for the model, but only under certain conditions. For example, Michele Belot and Timothy Hatton (2012) examine the education levels immigrants from 70 source countries to 21 OECD countries. They find that immigrants tend be more positively selected in terms of education as the difference in wages between high- low-educated workers, which proxies for the relative return to skill, widens between the des nation and the source country. In other words, as the return to skill increases in the destil relative to the origin, selection becomes more positive. However, they only find this res when they control for the poverty rate in the source country. Belot and Hatton hypothesize poverty prevents low-skilled people from migrating from countries with high returns to ski Jeffrey Grogger and Gordon Hanson (2011) apply the selection model to data on the ed cation levels of immigrants from more than 100 source countries to 15 high-income OEG destination countries. They note that immigrants to the OECD countries they examine positively selected even though in many cases the model predicts, based on the relative retu to skill, that they should be negatively selected. Grogger and Hanson find that bigger dife ences in the relative return to skill between the destination and the origin decrease immig selectivity, the opposite of the model's prediction.? They obtain this result using a variety measures of the relative return to skill. They argue that liquidity constraints—the inability save or borrow enough to migrate-—may explain why low-skilled people do not move though they would experience the biggest proportional gains from moving. Other reseas also finds evidence at odds with the Roy model and attributes it to migration costs or ba to immigration by the low skilled (e.g., Briicker and Defoort, 2009). There are several additional limitations that apply to both earlier and more recent studies One is that most available data combine all types of immigrants. Ideally, researchers would ha separate data on economic immigrants, refugees and family-based immigrants. The model a different prediction for refugees than for economic immigrants, and it does not apply well family-based immigrants who do not plan to work. Data that combine all types of immigran may appear to not support the model simply because the data combine groups with differe predicted effects. Another limitation is that researchers typically do not know immigra characteristics prior to migration. Immigrants” earnings in the origin before migrating usually not known, nor are their education levels prior to migrating. If immigrants acq education in the destination, it may not be a surprise that immigrants have more educatio than people who do not migrate.*  Selection in Immigration 93 ed relative to the destination country skill distribution. However, more evidence on ge growth among refugees relative to natives, not just other immigrants, in various desti- tion countries is needed. One way to examine the role of immigration policy in selection is to look at how immi- nts are selected in the absence of immigration policy. During the late 1800s and early 300s, the United States imposed few barriers to immigration from Europe. Virtually one in good health with the funds to migrate could enter the United States and stay e. Ran Abramitzky, Leah Platt Boustan and Katherine Eriksson (2012, 2013) examine migrants from Norway to the United States during that time. One-quarter of Norway's pulation eventually migrated to the United States. Norway had a more unequal income tribution than the United States at the time, so the Roy model predicts negative selec- n. Historical records indicate that immigrants were indeed negatively selected in terms family wealth. Norwegians who, because of their birth order or sibling composition, uld expect to inherit land were less likely to migrate. In addition, migrants had poorer thers than non-migrants did. Today, there are no barriers to immigration to the United States by people born in U.S. ter- tories, such as Puerto Rico. Earnings inequality is higher in Puerto Rico than in the United jates, suggesting that Puerto Rico—U.S. migration should be negatively selected. Research s that this is indeed the case. As of 2000, almost 45 percent of working-age men born in erto Rico who had not completed high school had moved to the United States, compared th 30 percent of college graduates (Borjas, 2008). Interestingly, Puerto Rico also experi- s inflows from the United States, typically by descendants of earlier Puerto Rico-U.S. grants. These U.S.—Puerto Rico migrants are positively selected on education, as the Roy odel predicts. The United States also allows unrestricted immigration by citizens of the Federated States Micronesia (FSM), a set of islands in the western Pacific Ocean. Research shows that FSM— LS. immigrants have higher education levels than non-migrants (Akee, 2010). Immigrants tend to be positively selected on earnings. Earnings inequality is higher in FSM than in aii and Guam (the main places FSM migrants go), so this positive selection is counter to Roy model's prediction. The relative return to skill is thus not the only factor that deter- ines the composition of migration flows, Zable 4.2 Distribution of Mexican residents and immigrants by education in 2000 Years of education Men Women Mexican residents Mexican immigrants Mexican residents Mexican immigrants 0-9 69.4 60.1 72.5 62.0 10-11 45 55 4.0 9 12 10.1 212 44,2 20.4 1315 4.7 3.3 Hed 198 16+ ES 5.0 8.0 4.8 Source: Table 2 of Chiquiar, D. and Hanson, G. H, (2005) “International Migration, Self-Selection, and the Distri- bution of Wages: Evidence from Mexico and the United States” Journal of Political Economy 113(2), pp. 239-281. 94 Immigrant Selection and Assimilation Selection among Mexico—U.S. immigrants Economists have devoted considerable attention to the direction of selection among Mexico— U.S. immigrants because of the sizable magnitude of this migration stream. The Roy model pre- dicts that immigrants from Mexico will be negatively selected since Mexico has greater earnings inequality and higher returns to schooling than the United States. However, several studies show that Mexican immigrants tend to be more educated than non-migrants (e.g., Chiquiar and Han- son, 2005; Orrenius and Zavodny, 2005; Caponi, 201 ye Table 4.2 shows the distribution of adult Mexicans living in Mexico and in the United States in 2000. The proportions who have at most nine years of education or 16 or more years of education are lower among immigrants than among non-migrants. The opposite is true for intermediate levels of education. The proportion with 12 years of education is about twice as high among immigrants as among non-migrants. Importantly, these data do not include people who migrated before age 21. This pattern is | therefore unlikely to be due to Mexican immigrants acquiring education in the United States. In addition, research shows that Mexico—U.S. immigrants” skill levels would place them in the middle or upper end of Mexico's earnings distribution (Chiquiar and Hanson, 2005). This again suggests that the direction of selection in Mexico—U.S. migration is intermediate or pos- itive, not negative. Despite this evidence of intermediate selection on education, Mexico-U.S. immigrants appear to be negatively selected from Mexico's earnings distribution—they are from the bottom of the earnings distribution there. This suggests that workers who earn less in Mexico than they should given their skill level—workers with a relatively low return to skill—are more likely to migrate (Ambrosini and Peri, 2012; Kaestner and Malamud, 2014). Together, these patterns are consistent with Mexico—U.S. immigrants being negatively selected on unobservable characteristics, whereas intermediate selection occurs on observable characteristics like education. Barriers to migration by the least skilled may explain why the direction of selection in Mexico—U.S. immigration does not match the model's prediction with regard to observable characteristics. Such barriers include limited networks and liquidity constraints. Research shows that Mexico-U.S. migration is negatively selected from communities with sizable migrant networks but positively selected from communities with small migrant networks (Ibarraran and Lubotsky, 2007; McKenzie and Rapoport, 2010). Less-skilled migrants may rely on friends or family in the United States to help them find jobs and housing there. Skilled migrants, in contrast, may be better able to navigate U.S. job and housing markets on their own. As Mexican migrant networks have grown over time in the United States, immigrants from Mexico are likely to have become more negatively selected. Research indicates this | appears to be the case (e.g., Campos-Vazquez and Lara, 2012). Bigger networks also help potential immigrants borrow from people who have already migrated. This relaxes liquidity constraints that may prevent the poor from migrating, Selec- tion from rural Mexico tends to be more positive than from urban Mexico, in part because of differences in the return to skill but also because of differences in networks and wealth (Fernández-Huertas Moraga, 2013). An anti-poverty program in Mexico named Oportuni- dades that gives money to low-income households leads to more migration by those house- holds, consistent with liquidity constraints (Angelucci, 2013). The additional migration  Selection in Immigration 95 ers the average skill level among migrants, suggesting that the direction of selection is sitive or intermediate. U.S. border enforcement appears to affect selection among unauthorized Mexican immi- rants. Selection becomes more positive when U.S. border enforcement, as measured by tal hours worked along the U.S.—Mexico border by U.S. Border Patrol agents, is stricter enius and Zavodny, 2005). Stricter enforcement raises migration costs because unautho- ed immigrants are more likely to need to hire a coyote-—a smuggler—to help them enter United States. In terms of Figure 4.2(a), the destination wage line effectively shifts down en migration costs go up. The degree of positive selection then increases, and the number immigrants falls. lection on health economic research on immigrant selection has focused on immigrants” education or ings, but a few studies have examined selection on health. Studies typically find that immi- rants are positively selected on health relative to both non-migrants in the origin and natives the destination (e. 2+, Kennedy et al., 2006). This hypothesis is known as the “healthy immi- nt effect.” - There are several potential explanations for the healthy immigrant effect. First, health tends be positively related to education and income. Immigrants tend to be positively selected education relative to non-migrants and must have enough income to bear migration costs, it is not surprising that immigrants tend to be healthier than non-migrants in the origin. ít immigrants also tend to be healthier than natives in the destination, even in destination ountries where immigrants have less education and lower incomes, on average, than natives. migration policies that screen immigrants on health, income or skill may contribute to the salthy immigrant effect. Self-selection may also play a role. Characteristics that increase the likelihood a person “comes an immigrant, such as having a low discount rate, may be associated with healthy iors. Such behaviors include exercising, eating a healthy diet and not smoking. Immi- ts also tend to be relatively young, so adverse health conditions may have not yet man- fested for many immigrants, The healthy immigrant effect tends to decrease as duration of esidence in the destination increases, as discussed in the next chapter. Irish immigrants to England are an interesting example of selection and health. As Liam Delaney, Alan Fernihough and James Smith (201 3) show, Irish immigrants to England who were before 1920 or after 1960 tend to be healthier than their counterparts who remained in and and than the English. However, the opposite is true for those who were born between 920 and 1960. That group of migrants tended to be negatively selected on education as well, nd they had experienced relatively high rates of child abuse. This created high psychic costs of faying in Ireland for many of them. Although studies typically emphasize the psychic costs of igrating, it is important to note that some people may face greater psychic costs of staying, The dy notes that although these migrants have relatively poor physical and mental health, they obably benefited from the fact that health care quality tended to be higher in England than in land when they migrated. 98 — Immigrant Selection and Assimilation Never migrate Migrate and stay in destination Skill Figure 4.6 The direction of selection in permanent and return migration if the relative return skill is higher in the destination. given in equation 4.11 migrate and never return. People in the middle region migrate and return. Both cutoffs shift to the left as the average wage in the destination, Él, increases and the right as the average wage in the origin, a, increases. An increase in the value in the origi of skills acquired abroad, k, widens the intermediate range by causing the lower cutoff to to the left and the higher cutoff to shift to the right. More people will migrate and then re? because skills acquired abroad are more valuable in the origin. An increase in $, the relati return to skill in the destination, shrinks the intermediate range by causing the cutoffs to mi closer together. Fewer people migrate, but those who do are less likely to return migrate. 1 Ó is positive and less than one, the return to skill is lower in the destination than in origin, The Roy model then predicts that immigration is negatively selected. The inequaliti in equations 4.11 and 4.12 switch direction, The most-skilled people never migrate. Amo migrants, the least skilled remain in the destination while those in the middle region ret migrate. In essence, the model predicts that return migration reinforces the direction of selection k migration. If migration is positively selected, it becomes more positively selected over ti as a consequence of return migration. If migration is negatively selected, it becomes mo) negatively selected over time as a consequence of return migration. The model also predicts the optimal duration of migration, T*, which is . _f-u+(n-1)e+k (4.13 2k T Equation 4.13 yields several predictions.*The optimal duration of migration increases as average wage in the destination (H) rises and decreases as the average wage in the origin (M) rises. If the return to skill is higher in the destination than in the origin (8 > 1), the opti  Selection in Immigration 99 tion of migration increases as skill, £, increases. The opposite is true if the return to skill er in the origin. ical evidence on selection in return migration and Bratsberg examine the validity of the model using average wages and out-migration És among U.S. immigrants by country of origin. They find that immigrants” average wage reases as the out-migration rate increases if the return to skill —measured using the 90/20 e share-—is lower in the origin than in the United States. In this case, the model predicts selection in initial migration is positive, and selection in return migration is negative. ersely, average wages decrease as the out-migration rate increases if the return to skill her in the origin than in the United States. In this case, the model predicts that selection ¡al migration is negative, and selection in return migration is positive. The relation- between average wages and out-migration rates that Borjas and Bratsberg find match nodel's prediction that out-migration intensifies the direction of selection. They also find out-migration rates from the United States increase as origin country GDP rises, which nsistent with the model. related research, Bratsberg (1995) finds support for the model among foreign students in the United States. The lower the return to skill or income inequality in their home , the more likely students are to stay in the United States after finishing their studies. ents tend to return if they receive a high return in the origin on their studies. Ifincome ty is lower in the origin than in the United States, the average wage among highly cated immigrants from that country falls as more foreign students stay in the United es after completing their studies. Conversely, the average wage among highly educated 'ants increases as more foreign students stay in the United States after completing their es ifincome inequality is higher in the origin than in the United States. In other words, least skilled leave if income inequality is lower in the origin, pushing average wages up ng those who remain. The most skilled leave if income inequality is higher in the origin, ing down average wages among those who remain. This result is consistent with the Out-migration from the United States generally appears to be negatively selected. One finds that out-migrants are negatively selected among foreign-born scientists and engi- s in the United States (Borjas, 1989). Another study likewise finds that out-migration n the United States is negatively selected among immigrants as a whole (Lubotsky, 2007). pattern is different for Sweden and Finland. Migration to those countries is negatively ected on education, while return migration from those countries is positively selected poth and Saarela, 2007). Sweden and Finland have much less income inequality and lower s to skill than the United States, which may explain this pattern. The direction of return migration to Mexico from the United States has received consid- ble attention. Return migration to Mexico from the United States is high-—an estimated percent of people who left Mexico for the United States during 2005 to 2010 returned Mexico by 2010, for example (Campos-Vazquez and Lara, 2012). Researchers have com- ed return migrants with people who have never migrated and with migrants who have ined in the United States. One study finds positive selection among return migrants  100 Immigrant Selection and Assimilation relative to never-migrants in 1990 but negative selection for men and intermediate selection for women in 2010 (Campos-Vazquez and Lara, 2012). The change could be due to a decrease in the return to skill in Mexico relative to the United States over time, a decrease in migration costs or an increase in networks that enables less-skilled people to migrate but also leads to them returning. Return migrants appear to be positively selected among the pool of Mexican: migrants (Ambrosini and Peri, 2012; Biavaschi, 2012). Final thoughts on selection Selection can be measured relative to either the origin or the destination. Origin countries are mainly interested in the characteristics of the people who leave relative to those who stay. Destination countries are mainly interested in the characteristics of immigrants relative to natives and earlier immigrants, not relative to the origin population. Both origin and des- tination countries care about whether return migrants are positively or negatively selected among immigrants in the destination. The next chapter discusses another way of thinki about immigrant selection: assimilation, or how well immigrants do in the destination, both. initially and over time. Problems and discussion questions 1 Explain how a decrease in the return to skill in the origin affects the direction of selection and the number of immigrants if (a) immigration is positively selected, or (b) immigra- tion is negatively selected. Assume that the return to skill in the destination and migration costs do not change. 2 Explain how a decrease in the average wage in the destination affects selectivity and the: number of immigrants if (a) immigration is positively selected, or (b) immigration is neg- atively selected. Assume that the return to skill in the destination and migration costs do. not change. 3 Suppose a destination country adopts a policy that guarantees all residents, including. immigrants, a minimum income well above the current lowest income in the origin. How will this affect the direction of selection and the number of immigrants if (a) immi- gration is positively selected, or (b) immigration is negatively selected? Assume that the: earnings distribution in the origin and migration costs do not change. 4 Cana destination country experience both positive and negative selection in immigration at the same time? Why or why not? 5 Can a destination country experience both immigration from an origin country and return migration to that country at the same time? If so, what does that imply about the directions of selection for immigration and return migration? 6 Explain what happens to the number of immigrants, the number of return migrants and selectivity in initial and return migration if the value of skills acquired in the destination: declines in the origin country. What happens if instead the return to skill falls in the des- tination relative to the origin? 7 Income taxes can affect immigrant selection. Suppose the destination country has a more progressive tax structure than the origin country. How would this affect selection?