Aggregate Fluctuations and International Migration

in Scandinavian Journal of Economics (2019), 121(1), 69-106

Traditional theories of integration such as the optimum currency area approach attribute a prominent role to international labour mobility in coping with relative economic fluctuations between countries ... [more ▼]

Traditional theories of integration such as the optimum currency area approach attribute a prominent role to international labour mobility in coping with relative economic fluctuations between countries. However, recent studies on international migration have overlooked the role of short-run factors such as business cycles or changes in employment rates in explaining international migration flows. This paper aims to fill that gap. We first derive a model of optimal migration choice based on an extension of the traditional Random Utility Model. Our model predicts that an improvement in the economic activity in a potential destination country relative to any origin country may trigger some additional migration flows on top of the impact exerted by long-run factors such as the wage differential or the bilateral distance. Compiling a dataset with annual gross migration flows between most developed countries over the 1980-2010 period, we empirically test the magnitude of the effect of these short-run factors on bilateral flows. Our econometric results indicate that aggregate fluctuations and employment rates affect the intensity of bilateral migration flows. We also provide compelling evidence that the Schengen agreement and the introduction of the euro significantly raised the international mobility of workers between the member countries. [less ▲]

Efficiency gains from liberalizing labor mobility

in Scandinavian Journal of Economics (2015), 117(2), 303-346

In this paper, we quantify the effect of a complete liberalization of cross-border migration on the world GDP and its distribution across regions. We build a general equilibrium model, endogenizing ... [more ▼]

In this paper, we quantify the effect of a complete liberalization of cross-border migration on the world GDP and its distribution across regions. We build a general equilibrium model, endogenizing bilateral migration and income disparities between and within countries. Our calibration strategy uses data on effective and potential migration to identify total migration costs and visa costs by education level. Data on potential migration reveal that the number of people in the world who have a desire to migrate is around 400 million. This number is much smaller than that predicted in previous studies, and reflects the existence of high “incompressible” migration costs. In our benchmark framework, liberalizing migration increases the world GDP by 11.5–12.5 percent in the medium term. Our robustness analysis reveals that the gains are always limited, in the range of 7.0 percent (with schooling externalities) to 17.9 percent (if network effects are accounted for). [less ▲]

Climatic Factors as Determinants of International Migration

in Scandinavian Journal of Economics (2015), 117(2), 723-767

We examine natural disasters and long-run climatic factors as potential determinants of international migration, implementing a panel dataset of bilateral migration flows, 1960- 2000. We find no direct ... [more ▼]

We examine natural disasters and long-run climatic factors as potential determinants of international migration, implementing a panel dataset of bilateral migration flows, 1960- 2000. We find no direct impact of long-run climatic factors on international migration across our entire sample. These results are robust when conditioning on origin country characteristics and when considering migrants returning home and the potential endogeneity of migrant networks. Rather we find evidence of indirect effects of environmental factors operating through wages. We find that epidemics and miscellaneous incidents spur international migration and strong evidence that natural disasters beget greater flows of migrants to urban environs. [less ▲]

Network Effect in International Migration: Does Education Matter More than Gender?

in Scandinavian Journal of Economics (2013), 115(2), 354-380

In this paper, we analyze the impact that networks have on the structure of international migration flows. In particular, we investigate whether diaspora externalities are different across education ... [more ▼]

In this paper, we analyze the impact that networks have on the structure of international migration flows. In particular, we investigate whether diaspora externalities are different across education levels and gender. Using new data that include both dimensions, we analyze the respective impact that networks have on the proportion of each category of migrant. Therefore, in contrast to the preceding body of literature on the macro determinants of international migration, we can identify the factors that influence the selection in terms of skills and in terms of gender. We find that network effects vary by education level, but not by gender. [less ▲]

CES production functions and economic growth

in Scandinavian Journal of Economics (2000), 102(1), 41-56

We examine inconsistencies and controversies related to the use of CES production functions in growth models. First, we show that not all variants of CES functions commonly used are consistently specified ... [more ▼]

We examine inconsistencies and controversies related to the use of CES production functions in growth models. First, we show that not all variants of CES functions commonly used are consistently specified. Second, using a simple growth model, we find that a higher elasticity of substitution leads to a higher steady state and makes the emergence of permanent growth more probable. It is also pointed out that the effect of a higher elasticity of substitution on the speed of convergence depends on the relative scarcity of the factors of production. Finally, we discuss possible explanations of variations in the elasticity of substitution. [less ▲]