3. Labour Mobility

Question 1

What are the 4 theories of migration we study

Answer 1

•neoclassical approach
•human capital theory
•family migration
•push and pull migration

Question 2

What is labour mobility?

Answer 2

The mechanism the labour markets use to improve the allocation of workers to firms

Question 3

What is the neoclassical approach to labour mobility?

Answer 3

The wage differential between places causes a migration flow from low wage to high wage regions

Question 4

What is the human capital theory?

Answer 4

Individuals calculate the expected present value of lifetime earnings if they migrate and if they stay put

Question 5

Reasons for return or repeat migration

Answer 5

•initial migration decision was a mistake
•stepping stone career paths

Question 6

How does family effect migration?

Answer 6

There is less migration when families are considered however having a family allows for risks to be diversified by part of the family staying home

Question 7

Push supply migration

Answer 7

Affects the aggregate supply curve alone. It can be caused by positive economic conditions in receiving countries relative to home or demographic determinants affecting labour supply decisions of migrants

Question 8

Pull demand migration

Answer 8

Deals with migration that responds to a shift in the demand curve

Question 9

What factors are considered to be determinants of pull migration?

Answer 9

All internal factors affecting AD

Question 10

What factors are considered to be determinants of push migration?

Answer 10

All internal or external factors affecting AS that are also associated with migration

Question 11

What factors have an impact on the likelihood of migration occurring according to the empirical evidence?

Answer 11

•difference in wages between two countries
•distance
•age
•education

Question 12

How did Chiswick think immigrants performed in host countries?

Answer 12

Initially they started off on lower wages than natives but they would overtake them 10/15 years later

Question 13

What did Friedburg argue?

Answer 13

That human capital isn’t perfectly portable due to differences in education systems, low valuation of experience in foreign country and discrimination

Question 14

What did Borjas argue?

Answer 14

That the cross section estimate of Chiswick maybe sensitive to a cohort effect if the average quality of immigrants has fallen over time

Question 15

Negative assimilation

Answer 15

Says where countries are approximately economically equal that migration occurs when the individual experiences a favourable draw in terms of wages

Question 16

What is immigration surplus?

Answer 16

The increase in NI to natives as a result of immigration

Question 17

How does immigration effect redistribution?

Answer 17

Immigration causes a redistribution of wealth from labour to capital

Question 18

Drawbacks to simple model on immigration

Answer 18

-depends on shape of supply and demand curves
-neglects indirect demand effects
-doesn’t include skills

Question 19

Human capital externalities

Answer 19

Where immigration of skilled workers brings new forms of knowledge which makes natives more productive

Question 20

Who are wage effects greatest for?

Answer 20

Resident workers who themselves are migrants since they are most similar

Question 21

Example of a natural experiment for immigration

Answer 21

The Mariel boatlift

Question 22

What is another possible reason why natives are opposed to immigration

Answer 22

Because it alters communities