Research Highlights

The research highlights contains abstract of recently published working papers and highlights of other important  publications on migration issues.

What do we know about the Japan-Brazil migration and remittance corridor?
Junichi Goto, Kobe University, Japan

Since the revision of the Japanese immigration law in 1990, there has been a dramatic influx of Latin Americans, mostly Brazilians, of Japanese origin (Nikkeijin) working in Japan. The immigration of more than 250,000 Nikkeijin in Japan is likely to have a significant impact on both the Brazilian and the Japanese economies, given the substantial amount of remittances they send to Brazil. The impact is likely to be felt especially in the Nikkeijin community in Brazil. In spite of their importance, the detailed characteristics of Nikkei migrants and the prospect for future migration and remittances are under-researched. The purpose of WPS4203 is therefore to provide a more comprehensive account of the migration of Nikkeijin workers to Japan. The paper contains a brief review of the history of Japanese emigration to Latin America (mostly Brazil), a study of the characteristics of Nikkeijin workers in Japan and their current living conditions, and a discussion on trends and issues regarding immigration in Japan and migration policy. The final part of the paper briefly notes the limitation of existing studies and describes the Brazil Nikkei Household Survey, which is being conducted by the World Bank's Development Research Group at the time of writing this paper. The availability of the survey data will contribute to a better understanding of the Japan-Brazil migration and remittance corridor.

Migration from Zambia: is temporariness possible through cooperation?
Aaditya Mattoo (DECRG) and Mohammad Amin (FPDEA) 

WPS4145 analyzes migration from Zambia in order to understand how migration policy can support development in the least developed countries. Overall emigration from Zambia is not high by regional standards, but the pattern of migration is skewed toward the skilled and away from the unskilled. A development-friendly approach to migration for Zambia would strive to ensure the temporariness of both types of movement. First, industrial countries may be willing to accept a higher level of unskilled immigration if they could be certain that it is temporary. Second, any adverse effects of brain drain would be greatly alleviated if skilled emigration is temporary. The problem is that host countries cannot unilaterally ensure temporariness of unskilled migration because repatriation cannot be accomplished without the help of source countries like Zambia, and source countries today have little incentive to facilitate the return of the unskilled. At the same time, source countries like Zambia cannot unilaterally ensure temporariness of the skilled because repatriation cannot be accomplished without the help of the host countries, and host countries currently have little incentive to send back the skilled. So, there is a strong case and considerable scope for cooperation between source countries like Zambia and destination countries in the design and implementation of migration policy so that unskilled migration becomes feasible and skilled migration takes a more desirable form. More information.

WPS4118  examines the role of migration networks in determining self-selection patterns of Mexico-U.S. migration. The authors first present a simple theoretical framework showing how migration networks impact on migration incentives at different education levels and, consequently, on the expected skill composition of migration. Next, they use survey data from Mexico to show that the probability of migration is increasing with education in communities with low migrant networks, but decreasing with education in communities with high migrant networks. The findings are consistent with positive self-selection of migrants being driven by high migration costs, and with negative self-selection of migrants being driven by lower returns to education in the U.S. than in Mexico.

What is the relationship between remittances and poverty?
Richard H. Adams, Jr. (DECRG) 

In (WPS4116) Adams examines the economic impact of international remittances on countries and households in the developing world. He uses new data from 115 developing countries. The results show that countries located close to a major remittance-sending region (like the United States, OECD-Europe) are more likely to receive international remittances, and that while the level of poverty in a country has no statistical effect on the amount of remittances received, for those countries which are fortunate enough to receive remittances these resource flows do tend to reduce the level and depth of poverty.

Does temporary migration have to be permanent?
Mohammad Amin (FPDEA) and Aaditya Mattoo (DECRG) 

In Working Paper (WPS3582) Amin and Mattoo find that unilateral migration policies are globally inefficient because they lead to too much permanent migration and too little temporary and overall migration. They conclude that existing international agreements on labor mobility, such as the World Trade Organization's General Agreement on Trade in Services, have failed to do better because they seek primarily to induce host countries to make commitments to allow entry. Instead, Pareto gains and more liberal migration could be achieved through multilateral agreements that enable host countries to commit to repatriation. More information.

Does migration reshape expenditures in rural households?
J. Edward Taylor (University of California, Davis) and Jorge Mora (Center for Economic Studies, El Colegio de Mexico) 

In Working Paper (WPS3842) Taylor and Mora offer empirical evidence that migration reshapes village household expenditure patterns in direct and indirect ways. The modeling approach the authors employ controls for the endogeneity of household migration decisions while testing for differences in expenditure patterns between migrant and non-migrant households in rural Mexico. Findings from their econometric analysis reveal that expenditure patterns differ significantly between migrant and non-migrant households, sometimes in surprising ways. This is true for both international and internal migration.

Which countries are most likely to receive remittances?
Richard Adams (DECRG)  

Working paper (WPS4116) examines the economic impact of international remittances on countries and households in the developing world. Adams estimates an econometric model based on a new data set of 115 developing countries and his results suggest that countries located close to a major remittance-sending region (like the U.S. or OECD-Europe) are more likely to receive international remittances. He also find that the level of poverty in a country has no statistical effect on the amount of remittances received.

How important is selection? Experimental versus non-experimental measures of the income gains from migration
David McKenzie (DECRG) John Gibson (University of Waikato) and Steven Stillman (Motu Economic and Public Policy Research) 

Measuring the gain in income from migration is complicated by non-random selection of migrants from the general population, making it difficult to obtain an appropriate comparison group of non-migrants. In working paper (WPS3906) the authors use a migrant lottery to overcome this problem, providing an experimental measure of the income gains from migration. The authors find evidence of migrants being positively selected in terms of both observed and unobserved skills. As a result, non-experimental methods are found to overstate the gains from migration, by 9 to 82 percent.

Can migration reduce educational attainment?
David McKenzie (DECRG) and Hillel Rapoport (Bar-Ilan University, Israel) 

In working paper (WPS3952) the authors examine the impact of migration on educational attainment in rural Mexico. Using historical migration rates by state to instrument for current migration, they find evidence of a significant negative effect of migration on schooling attendance and attainment of 12 to 18 year-old boys and 16 to 18 year-old girls.

IV-Censored Ordered Probit results show that living in a migrant household lowers the chances of boys completing junior high school and of boys and girls completing high school. The negative effect of migration on schooling is somewhat mitigated for younger girls with low educated mothers, which is consistent with remittances relaxing credit constraints on education investment for the very poor. However, for the majority of rural Mexican children, family migration depresses educational attainment. Comparison of the marginal effects of migration on school attendance and on participation in other activities shows that the observed decrease in schooling of 16 to 18 year-olds is accounted for by the current migration of boys and increased housework for girls.

Do workers' remittances reduce the probability of current account reversals?
Matteo Bugamelli and Francesco Paterno

In working paper (WPS3766) Bugamelli and Paterno combine the literature on financial crises in emerging markets and developing economies with that on international migrations by investigating whether the increasingly large flows of workers' remittances can help reduce the probability of current account reversals.

The rationale for this stands in the great stability and low cyclicality of remittances as compared with other private capital flows: these properties, combined with the fact that remittances are cheap inflows of foreign currencies, might reduce the probability that foreign investors suddenly flee out of emerging markets and developing economies and trigger a dramatic current account adjustment.

The authors find that remittances can have such a beneficial effect. In particular, they show that a high level of remittances, as a ratio of GDP, makes the relationship between a decreasing stock of international reserves (over GDP) and a higher probability of current account crises less stringent. The same occurs, though less neatly, for the positive relationship between an increasing stock of external debt (over GDP) and the probability of current account reversals. The results point also to a threshold effect of remittances: the mechanisms just described are, in fact, much stronger when remittances are above 3 percent of GDP.

Can guest worker schemes reduce illegal migration?
Mohammad Amin (FPDEA) and Aaditya Mattoo (DECRG)

In working paper (WPS3828) Amin and Mattoo analyze recent efforts at international cooperation to limit illegal migration, particularly through the use of legal migration avenues like guest worker schemes.

They show that while guest worker schemes may be desirable as an avenue of international migration, they are an inefficient instrument to induce cooperation on illegal migration.

On the one hand, guest worker schemes suffer from a negative selection problem relative to illegal migration, which tends to erode their attractiveness to source countries. On the other hand, guest worker schemes increase total (legal and illegal) migration which make them a costly compensating device for the host country. Moreover, guest worker schemes create additional pressure on host countries to implement tough laws against illegal immigration even when the host finds such laws undesirable. Thus, less favorable treatment of illegal immigrants, as in California Proposition 187, may be an inevitable rather than incidental outcome of reliance on guest worker schemes. In contrast, countries that are willing to use transfers and other forms of economic assistance to induce source countries to cooperate can afford relatively liberal treatment of illegal immigrants.

What is the amount of informal remittances sent to developing countries?
Freund, Caroline (DECRG) and Spatafora, Nikola (IMF)

In 2004 recorded remittance flows to developing countries reached $ 100 billion. However, these statistics are likely to significantly understate true remittances, as a large share is believed to flow through informal channels.

In working paper (WPS3704) Freund and Spatafora develop the first empirical methodology to estimate informal flows. They use insights from the literature on shadow economies and empirically estimate informal remittances for more than 100 countries using historical data on the balance of payments (BOP), migration, transaction costs, and country characteristics. 

Their results imply that informal remittances amount to about 35-75 percent of official remittances to developing countries. There is significant regional variation: informal remittances to Sub-Saharan Africa and Eastern Europe and Central Asia are relatively high, while those to East Asia and the Pacific are relatively low.

The results also shed light on the determinants of recorded remittances and the associated fees in the formal sector. The authors find that the stock of migrants in OECD countries is the primary determinant of remittances. In addition, money transfer fees and the presence of dual exchange rates reduce the share of remittances reported in national accounts. In turn, transaction costs are systematically related to concentration in the banking sector, lack of financial depth, and exchange rate volatility. There is also evidence that remittances are misrecorded in the BOP as "errors and omissions."

What is the impact of changes in immigration policy on migration flows? A case study of Switzerland and the former Republic of Yugoslavia
Dominique M. Gross, Simon Fraser University

In working paper (WPS3880) of the World Bank’s International Migration and Development Research Program, Dominique M. Gross evaluates the stability of the determinants of immigration inflows from the former Republic of Yugoslavia to Switzerland in the face of changes to immigration policy.

Since 1995, Switzerland has implemented a new policy giving priority to workers from the EU for new work permits and imposing severe restrictions on work permits issued to migrants from the rest of the world.

The empirical analysis shows that when there is no discriminatory treatment by immigration policy, immigrant workers from the former Republic of Yugoslavia respond to financial and cultural incentives in the same way as their unskilled counterparts from Southern European countries. The restriction on permit availability in the mid-1990s appears to have weakened the financial and cultural attractiveness of Switzerland for immigrants from the former Yugoslavia. This may signal a change in the characteristics of migrants from the region toward higher skill levels.

This paper is part of a larger effort to assess how policy measures affect migration, and it will be included in the forthcoming volume: International Migration Policy & Economic Development: Studies Across the Globe.

Could the tearing down of paper walls increase the benefits from migration?
David J. McKenzie, DECRG

In working paper (WPS3783) of the World Bank’s International Migration and Development Research Program, David J. McKenzie studies migrant-sending countries policies that impact on the ability of people to emigrate under the existing system.

His paper documents the existence and impact of two such policies: passport costs and legal restrictions on emigration. New data collected on passport costs in 127 countries reveals enormous variation in the cost of a passport from one country to the next. One in every 10 countries in the sample is found to have passport costs exceeding 10 percent of annual per capita income. High passport costs are found to be associated with poor governance, especially in terms of the quality of the bureaucracy, and with lower levels of migration. Countries that place legal restrictions on the rights of women to emigrate are also found to have lower migration rates than countries with similar income and population levels.

These findings suggest there is scope for some developing countries to receive greater benefits from migration by tearing down the paper walls they place around their own citizens.

This paper by David McKenzie is part of a larger effort by the International Migration and Development Research Program to identify the determinants of migration in developing countries.

Do men and women use remittances differently?
Pablo Acosta, University of Illinois at Urbana-Champaign

In a recently published working paper (WPS3903) of the World Bank’s International Migration and Development Research Program, Pablo Acosta explores the impact of international remittances on households in El Salvador. 

After controlling for household wealth and using selection correction techniques such as propensity score matching as well as village and household networks as instruments for remittances receipts, average estimates suggest that girls and young boys (less than 14 years old) from recipient households seem to be more likely to be enrolled at school than those from nonrecipient households. Remittances are also negatively related to child labor.

Furthermore, his results indicate that the additional income derived from migration reduces women's labor supply, but has no major impact on activity choice for males 14 years or older. The author concludes that his study reveals the presence of gender differences in the use of remittances across (and possibly, within) households.

This paper by Pablo Acosta will be included in the forthcoming volume: International Migration Policy & Economic Development: Studies Across the Globe which is currently being produced by the International Migration and Development Research Program.

What is the nature of the relationship between trade and factor movement?
Maurice Schiff, DECRG

In a recently published working paper (WPS3974) of the World Bank’s International Migration and Development Research Program, Maurice Schiff revisits a topic that has long been of interest to economists – The nature of the relationship between trade and factor movement.

Two classic papers on the relationship between trade and factor movement are Mundell (1957) and Markusen (1983). Mundell showed that substitution holds in the Heckscher-Ohlin model. Markusen challenged the substitution result and showed in five different models that removing barriers to factor movement results in complementarity under free trade, identical factor endowments and a change in any one of the other assumptions underlying the Heckscher-Ohlin model.

Schiff generalizes Markusen’s analysis by considering: i) the elimination of barriers to factor movement under any protection level; and ii) a change in trade barriers under free factor movement. He shows that: a) substitution holds under high protection; b) complementarity holds under low protection; and c) either substitution or complementarity hold for large increases (reductions) of low (high) protection rates.

This paper is part of a larger effort by the International Migration and Development Research Program to identify the links between trade, FDI and migration.

Do migrants stimulate foreign direct investments?
Beata S. Javorcik, Çaglar Özden, Mariana Spatareanu, and Cristina Neagu

In a recently published working paper (WPS4046) of the World Bank’s International Migration and Development Research Program, Beata S. Javorcik, Çaglar Özden, Mariana Spatareanu, and Cristina Neagu investigate the link between the presence of migrants in the United States and U.S. FDI in the migrants’ countries of origin.

While there exists a sizeable literature documenting the importance of ethnic networks for international trade, little attention has been devoted to studying the effects of networks on FDI.

The authors hypothesize that the existence of ethnic networks may positively affect FDI by promoting information flows across international borders and by serving as a contract enforcement mechanism. Taking into account the potential endogeneity concerns, their results suggest that U.S. FDI abroad is positively correlated with the presence of migrants from the host country. The data further indicate that the relationship between FDI and migration is driven by the presence of migrants with a college education.

This paper is part of a larger effort by the International Migration and Development Research Program to identify the links between trade, FDI and migration.

Are girls in migrant households better off than boys?
Ghazala Mansuri, DECRG

In two recently published working papers of the World Bank’s International Migration and Development Research Program Ghazala Mansuri, Economist, DECRG explores the impact of temporary economic migration in rural Pakistan. In the first paper the author investigates the relationship between migration and investment in child schooling (WPS3945).  In the second paper she asks whether migration allows households in sending communities to avoid costly risk coping strategies (WPS3946). 

The paper on schooling and migration concludes that the potential positive effects of temporary economic migration on human capital accumulation are large. Moreover, the gains are much greater for girls, yielding a very substantial reduction in gender inequalities in access to education. Significantly, though, the gains appear to arise almost entirely from the greater resource flows to migrant households. The author cannot detect any effect of future migration prospects on schooling decisions. More importantly, she does not find any protective effect of migration-induced female headship on schooling outcomes for girls. Rather, female headship appears to protect boys at the cost of girls.

In the second paper the author focuses on early child growth since there is considerable epidemiological evidence that very young children are particularly vulnerable to shocks that lead to growth faltering, with substantial long-term health consequences. Pakistan is a country where son preference is substantial, and there are large gender gaps in most developmental outcomes. As such, the interest is in examining also whether migration-induced resource flows allow households to extend better nutrition and health care protection to girls. After accounting for selection into migration, the results indicate that migration has a substantially larger positive impact on growth outcomes for young girls. And the growth advantage is sustained among older girls, suggesting potential intergenerational benefits of averting nutritional and other health shocks for girls in early childhood. These results are further validated by restricting the sample to migrant households and comparing the growth outcomes of siblings before and after migration.

The papers by Ghazala Mansuri are part of a larger effort to identify the determinants and impact of migration and remittances. Her work will be included in the forthcoming volume: International Migration Policy & Economic Development: Studies Across the Globe which is currently being produced by the International Migration and Development Research Program.

Does migration reduce the size of the world population?
Philippe Fargues, European University Institute

In a recently published working paper (WPS 4050) of the World Bank’s International Migration and Development Research Program Philippe Fargues argues that international migration may have resulted in a smaller world population than in the non-migration scenario. He explains that most of recent migration has been from high to low birth-rate countries, and since migrants typically adopt and send back ideas that prevail in host countries, they are potential agents of the diffusion of demographic modernity to their country of origin.

The author uses data from three major origin countries: Morocco and Turkey (where emigration is bound for the West), and Egypt (where emigration is bound for the Gulf). These three countries offer contrasted situations: the host countries are either more (the West) or less (the Gulf) advanced in their demographic transition than the home country. He finds empirical evidence that time series of birth rates and migrant remittances (reflecting the intensity of the relationship between the emigrants and their home country) are strongly correlated. Correlation is negative for Morocco and Turkey, and positive for Egypt. This suggests that Moroccan and Turkish emigration has been accompanied by a fundamental change of attitudes regarding marriage and birth, while the opposite holds for Egyptian migration.

The broader conclusions from this working paper are that migration may have caused a relaxation of demographic pressures for the world as a whole. Secondly, if it turns out that emigrants are conveyors of new ideas in this area, the same may apply to a wider range of civil behavior.

The work by Philippe Fargues is part of a larger effort to measure and analyze the impact of migration on transferability of ideas and institutions. His paper will be included in the forthcoming volume: International Migration Policy & Economic Development: Studies Across the Globe which is currently being produced by the International Migration and Development Research Program.

• Database on the International Migration of Physicians
• Paper (pdf - 231k)
• Presentation (pdf - 142k)

The database compiles information on foreign born physicians in the 16 most important O.E.C.D recipient countries, and we are hoping that it will contribute to a more well-informed research and policy debate on medical brain drain.

Dr. Bhargava's paper (co-authored with Frederic Docquier) analyzes the factors affecting emigration of physicians from sub-Saharan Africa and the effects of this medical brain drain on number of deaths due to AIDS, life expectancy, and economic growth using country-level longitudinal data at 3-year intervals for the period 1990-2004.

The work on brain drain of physicians is part of a larger effort to measure and analyze the extent and impact of the brain drain - on of the issues at the forefront of developing countries’ concerns.

 

If you are interested to subscribe, please send an e-mail to migration_research@worldbank.org.