REVISION Flashcards
(40 cards)
FOCUS QUESTION: How do migrants affect the development of their country of origin ?
3 WAYS ONLY (there are 5 total but last two not discussed)
1. Financial Remittances!!!!
2. Trade and investment linkages
3. Social/cultural remittances (fertility, consumption (consumption less important)) (transmit fertility norms of country their at back to their home country)
Financial Remittances
-> many developmental countries rely heavily on remittance flows
-> remittences: small amounts of money frequeutnly sents
-> circumvents all government(in theory), in reality not so much - avoids huge influence of corruption
-> data reflects formal remittance - part of problem is much of remittance flow is informal, doesn’t capture true relationship
(formal and informal channels)
-> you also have an entire private sector that doesn’t report data - even for formal channels lots of not recording
Why send remittances? (not super important)
-> remittances are VERY STABLE - because one country can be in recession and another not.
-> share of income of earners in the rich countries that they send home is quite high
How are remittances used:
-> initially low consumption levers - I in human capital - are capital investments productive?
->. meet consumption needs first, then investment
Remittance Trends
-> tend to increase, and cost of sending them is decreasing very slowly
Remittance Sending costs: randomised control trial - not necesary to remember
THERE IS NO RELATIONSHIP BETWEEN REMITTANNCES AND GROWTH
-> Clemens and McKenzie
because of the way they’re recorded
-> remittance growth has been overestimated - channels for remitting have diversified -
-> increase in number of formal records of remittance transactions due to crackdown on antiterrorism , not to say they’re not important
- Trade and investment linkages - his paper
Early theory - noy super important just understadn
William Gourld: empirical literature
- observes that migrant labour is different from domeestic labour - migrants often find opportunit for trade where there woudl no tbe without migration, as they lower the ost of trade
- Mechanisms:
1. immigrant preference hypothesis
2. immigrant linky hypothesis
3: Corollary
Prereneces necessarily ahve to occure in direction of trade!!!!! - transaction cost mechanism can operate in both directiosn
Genc et al
10% increase in immigrants -> 1.5% increase in bilateral trade
meant to be 22.1 million people (slide 34)
They forster trade by 10000 every year per migrant - some migrants much smaller than this, other much larger
Natural Experiment: exodus of the vietnamese boat people to united states betwe …. slide 36.
-> established first causal link between migration and trade
Findings!!!! Slide 37
Migrants efect on investment: Javorcik et al(2011)
-> worse data
-> but positive correlation!
- Social/Cultural Remittances - Network Effects
Fargues (2006): Demographic benefit of international migration - argues that international migration ahs reduced owrld pop relative to non-migration workd - individuals transite fertility norms back to their households
-> migrants adopt and send back cultural norms of receiving nation - thus agents of demographic change
-> descriptive study: 3 case studies(Morocco/Turkey, Egypt)
Results: (go in further)
ubecause egypt has high birth rates and egypt has high intensity to middle east, it has high birth rates
morocco sending migrants ot europe which has loewr birth rates, as such moroccos birth rates reduce
HOW?
-> maybe education,
Mechanisms:
- Alter inventives for parents to investin their own education
.2 Similarly, migration alters incentive for parents to invest in educeation of their children
Recent study: slide 44
-> poor data - best estimates (remember)
