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Social Science > Emigration and Immigration

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Cover IMF Staff Country Reports
Costa Rica: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
Selected Issues
Keywords:
labor market characteristic; refugees in Costa rica; estimation uncertainty; neutral real interest rate; card payment fee; Real interest rates; Migration; Labor markets; Social assistance spending; Caribbean
Cover IMF Working Papers
Emigration, Business Dynamics, and Firm Heterogeneity in North Macedonia
Ninghui Li and Thomas Pihl Gade
High emigration rates are a challenge in the Western Balkans. High emigration rates might lead to inadequate skilled labor and affect firm creation, capital formation, and economic convergence. The 2021 North Macedonia census reveals that more than 12.4% of North Macedonians live abroad. To assess the consequences, we estimate the impact of emigration on the number of firms and capital formation. Business dynamics can affect emigration reversely. To alleviate the endogeneity bias, we use a shift-share instrument with the historical diaspora networks and destination countries’ GDP growth rate as a source of exogenous variations. Our results show that (1) In the short run, a 1 percentage point increase in the emigration rate leads to a 2.91% decrease in the number of firms in the area of origin; (2) The long-run effects of emigration on the number of firms are less negative than the short-run impacts; (3) Emigration mainly reduces the number of micro and small firms; (4) Emigration affects the number of firms and capital formation more in the industrial sector than the other sectors, through the skilled labor shortage channel. This paper contributes to the literature on emigration and provides implications and policy considerations for developing countries, where high emigration rates are prevalent.
Keywords:
Emigration; Labor market; Firm dynamics; Capital formation; North Macedonia; Panel data.; emigration rate; business dynamics; firm Heterogeneity; emigration challenge; emigration effect; Migration; Unemployment rate; Industrial sector; Labor markets; Labor shortages; Global
Cover IMF Working Papers
The Macroeconomic Effects of Large Immigration Waves
Philipp Engler, Ms. Margaux MacDonald, Mr. Roberto Piazza, and Galen Sher
We propose a novel approach to measure the dynamic macroeconomic effects of immigration on the destination country, combining the analysis of episodes of large immigration waves with instrumental variables techniques. We distinguish the impact of immigration shocks in OECD countries from that of refugee immigration in emerging and developing economies. In OECD, large immigration waves raise domestic output and productivity in both the short and the medium term, pointing to significant dynamic gains for the host economy. We find no evidence of negative effects on aggregate employment of the native-born population. In contrast, our analysis of large refugee flows into emerging and developing countries does not find clear evidence of macroeconomic effects on the host country, a conclusion in line with a growing body of evidence that refugee immigrants are at disadvantage compared to other type of immigrants.
Keywords:
Immigration; productivity; dynamic gains; immigration wave; immigration shock; immigration episode; OECD migration flow data; migration shock; Migration; Employment; Total factor productivity; Estimation techniques; Middle East
Cover IMF Working Papers
Climate and Cross-Border Migration
Paula Beltran and Metodij Hadzi-Vaskov
Our work is positioned at the intersection of migration and climate change—two key forces shaping the economic outlook of many countries. The analysis explores: (i) the relative importance of origincountry vs destination-country factors in explaining migration patterns; (ii) importance of climate disasters as driver of cross-border migration; and (iii) the importance of climate-driven migration on the overall impact of climate on macroeconomic outcomes. It arrives at the following main findings. First, both origin-country and destination-country contribute to explaining migration outflows from EMDEs, although only the global shocks seem important for advanced economies. Second, climate disasters are important for explaining the origincountry migration shocks in LICs and EMDEs, are especially relevant for smaller countries, and lead to migration of both genders, albeit relatively more for males out of LICs. Third, important portion of climate’s overall impact on economic outcomes—especially agricultural GDP, remittances, and inequality—is captured via climate-driven migration. Finally, higher investment in climate-resilient infrastructure can reduce the impact of climate on cross-border migration, and thereby, result in potentially important economic gains.
Keywords:
International Migration; Climate; Climate Disasters; climate disaster; migration outflow; origin-country migration shock; migration pattern; climate-driven migration; Migration; Natural disasters; Climate change; Global
Cover IMF Working Papers
Coping with Climate Shocks: Food Security in a Spatial Framework
Diogo Baptista, John A Spray, and Ms. Filiz D Unsal
We develop a quantitative spatial general equilibrium model with heterogeneous house-holds and multiple locations to study households’ vulnerability to food insecurity from cli-mate shocks. In the model, households endogenously respond to negative climate shocks by drawing-down assets, importing food and temporarily migrating to earn additional income to ensure sufficient calories. Because these coping strategies are most effective when trade and migration costs are low, remote households are more vulnerable to climate shocks. Food insecure households are also more vulnerable, as their proximity to a subsistence requirement causes them to hold a smaller capital buffer and more aggressively dissave in response to shocks, at the expense of future consumption. We calibrate the model to 51 districts in Nepal and estimate the impact of historical climate shocks on food consumption and welfare. We estimate that, on an annual basis, floods, landslides, droughts and storms combined generated GDP losses of 2.3 percent, welfare losses of 3.3 percent for the average household and increased the rate of undernourishment by 2.8 percent. Undernourished households experience roughly 50 percent larger welfare losses and those in remote locations suffer welfare losses that are roughly two times larger than in less remote locations (5.9 vs 2.9 percent). In counterfactual simulations, we show the role of better access to migration and trade in building resilience to climate shocks.
Keywords:
Agriculture; Food Security; Trade, Migration; Climate change; Climate shocks; welfare loss; food consumption; migration cost; loss from climate; losses from climate change; Consumption; Migration; Income; Global
Cover Selected Issues Papers
Cancellation of Public Holiday in Denmark
Gohar Minasyan
Denmark cancelled a public holiday to increase labor supply, GDP, and fiscal revenues. This chapter discusses the expected labor supply impact of this change and compares it to alternative options for increasing labor supply.
Keywords:
Public holidays; labor regulation; leisure choices; labor supply impact; cancellation of public holiday; copyright page; main takeaway; Labor supply; Migration; Retirement; Employment rate; Labor markets
Cover IMF Working Papers
Migration, Search and Skill Heterogeneity
Myrto Oikonomou
Cross-border migration can act as an important adjustment mechanism to country-specific shocks. Yet, depending on who moves, it can have unintended consequences for business cycle stability. This paper argues that the skill composition of migration plays a critical role. When migration flows become more concentrated in skilled labor an important trade-off arises. On the one hand, migration releases unemployment pressures for the origin countries. On the other hand, it generates negative compositional effects (the so-called “brain drain” effects) and skill imbalances, which reduce supply capacity in origin countries. This paper analyses quantitatively the impact of cyclical migration in an open-economy Dynamic Stochastic General Equilibrium (DSGE) model with endogenous migration flows, trade linkages, search and matching frictions, and skill heterogeneity. I apply this framework to the case of the Greek emigration wave following the European Debt Crisis. What I find is that emigration flows implied strong negative effects for capital formation, leading to more than a 15 percentage point drop in investment. Rather than stabilizing the Greek business cycle, labor mobility led to a deeper and more protracted recession.
Keywords:
Migration; Matching Frictions; Skill Heterogeneity; emigration flow; cross-border migration; net emigration; risk-premium shock; Labor markets; Labor market frictions; Skilled labor; Labor mobility; Southern Europe
Cover IMF Staff Country Reports
Denmark: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper analyzes wage and inflation dynamics in Denmark. High profit margins contributed to growth in the gross domestic product deflator. Historical evidence suggests that the contribution from wages to price deflators will likely pick up. Nominal wage growth in Denmark has so far been modest and outpaced by high inflation, putting real wage growth in negative territory. Amid still-tight labor markets, this has raised concerns about wage pressures going forward and the eventual impact on inflation. The analysis suggests that wage formation in Denmark has historically been partly backward looking, and economic slack has played a role. Given these, high inflation realized thus far and the tightness in the labor market implies that wage pressures are expected to remain elevated in the near term. Some of these wage pressures, in turn, are expected to be passed on to core inflation, sustaining high inflation. Thus, determined policies to fight inflation are important.
Keywords:
B. inflation dynamics; inflation dynamics in Denmark; inflation expectation; main takeaway; IMF staff calculation; Inflation; Labor supply; Wages; Labor markets; Migration; Europe
Cover IMF Staff Country Reports
Nepal: Selected Issues
International Monetary Fund. Asia and Pacific Dept
This Selected Issues paper utilizes a new macro-model capturing food insecurity, migration and trade in Nepal. It shows that low yields and remoteness explain a majority of the difference in prevalence of food insecurity across districts in Nepal; both climate shocks and persistent climate-change increase food insecurity and disproportionately harm the most vulnerable; and lower wages in migrant destinations would reduce remittances, increase food insecurity and lower welfare. The paper then presents and quantifies a number of potential policies to address these issues. The paper quantifies the impact of a number of policy options (cash transfers, better infrastructure, and improved agricultural productivity) to address food insecurity and climate change. In addition to climate shocks, persistent climate change will lower welfare, increase food insecurity, and migration. Given the model results show that agricultural productivity is a key determinant of food security, Nepal can learn from other countries policies including in agricultural extension, improved community water management techniques, and climate resilient agriculture in line with the National Adaptation Plan.
Keywords:
food insecurity in Nepal; NAC's risk rating; migration cost; remittances in Nepal; NAC's borrowing; Climate change; Food security; Loans; Migration; Global
Cover IMF Working Papers
Northern Triangle Undocumented Migration to the United States
Ms. Alina Carare, Catherine Koh, and Mr. Yorbol Yakhshilikov
Undocumented migration from the Northern Triangle countries (El Salvador, Guatemala and Honduras) to the United States has been steadily increasing over the past 30 years, accelerating at times. The paper investigates what factors could explain this fact, by estimating an investment decision model, using annual data over 1990-2019. Economic labor market conditions (real wages and unemployment rates, especially in the U.S.) play a major role in explaining undocumented migration. Less explored drivers of undocumented migration tied to living conditions at home also explain well undocumented migration (natural disasters, coffee production, higher temperatures, and homicide rates). Tighter border enforcement measures act as a deterrent, and perceptions regarding changes of these measures could also drive up undocumented migration at times. Policies that address the root causes of migration at home, including with the U.S. help, are essential in reducing the difference between perceived benefits and expected costs of migration.
Keywords:
International migration; undocumented migration; U.S. Department of Agriculture; investment decision theory; U.S. Department of Homeland Security; NT country; Migration; Real wages; Income; Unemployment rate; Natural disasters; Caribbean; Western Hemisphere; Global