Demystifying Migration

International migration flows have been growing in the last decades all over the world. At the same time, anti-migration policies are being widely adopted as migration is perceived as a threat by some natives.

While claims such as that migrants threaten natives’ job opportunities or increase crime in the host country have received increasing attention in the popular press, such misperceptions are by no means recent. Already in the 70s, for instance, the return of Portuguese colonialists was seen with substantial hostility, with the Portuguese media displaying the repatriates as “stealing housing and jobs” from natives (Mäkelä, 2017).

Yet, several studies in economics, which are largely unknown to the general public, may help to overcome such misperceptions. This article will present some of the research on the topic to help demystify the phenomenon of migration.

Although only 3% of the world’s population are migrants, migration has been one of the most influential political issues in the rich world. Why? Partly, because far-right politicians create and fuel the misperceptions that people have regarding the number and composition of migrants (Alesina et al., 2018) and distort facts as a winning electoral tactic (Rodriguez et al., 2017).

Politicians not only take advantage of beliefs such as that immigrants are less educated, poorer, more likely to be unemployed and to live from government social transfers; but they also nourish the idea that migrants threaten a country’s cultural identity. Besides, a commonly heard claim is that migrants will diminish natives’ job opportunities and depress wages.

Contrary to what many people may think, not everyone who is poor wants to migrate to a rich country.

The willingness and the decision to migrate depends on several aspects such as the costs and the expected risk of the move, and the wage migrants-to-be hope to earn. A commonly observed phenomenon is that people suffering from extreme poverty who may gain from migrating might not be able to do so because they cannot afford to pay for the trip. In fact, several studies show that the people who migrate are not the poorest but are “middle-income” individuals whose families are able to raise enough funds to not only pay for the move but also for their education. Consequently, a growing number of migrants are high-skilled individuals in their early twenties (McKenzie, 2008) and in their final years of study (Groggr and Hanson, 2011), who look for higher wages in white-collar jobs and a better quality of life (Punch and Sugden, 2013).

Another aspect which migrants take into consideration is the support network that is, the friends and/or family they have in the destination country. Having a large destination network reduces the both the cost of migration (McKenzie & Rapoport, 2010) but also, increases the chances of success in the destination country; for example, evidence found by Batista and Costa (2018) shows that having close contacts in the destination country is associated with higher average monthly net salaries and a higher probability of having a permanent job contract

Furthermore, one major component of the decision to migrate has to do with preferences, and, in the eyes of the Nobel Prize Laureate Esther Duflo, people prefer to stay at home[1]. Consequently, an individual may prefer not to migrate even if he/she could be better-off by doing so. Batista and McKenzie (2018), conduct an incentivized lab experiment, testing several classic migration theories; they find that attaching the label “Home” to a country makes potential migrants more willing to choose that destination.

Nevertheless, although people prefer to stay at home, migration flows grew significantly in these last years due to crisis situations, namely conflicts such as the Syrian Civil War. Consequently, there is a large proportion of people who migrate because they have no other choice, because “home is the mouth of a shark”[2]!

However, even though these migrants are looking for safety and stability, natives fear an increase in the number of crimes. This belief can lead to tensions between locals and immigrants, xenophobia, racism, and prejudice.

In 2016, Former US President Donald Trump labelled Mexican immigrants as drug dealers, rapists, and criminals[3]. However, studies conducted in the US, Italy and England show that immigration does not influence these types of aggravated crimes (Spenkuch, 2010, Bianchi et al., 2012, Bell et al., 2010).

Immigration could be related, on the other hand, to an increase in minor criminal offenses, such as robberies, motivated by lack of financial conditions or legal permits (Spenkuch, 2010, Bianchi et al., 2012, Bell et al., 2010). Yet, these crimes represent only a small proportion of the overall crime rate of the country which implies that their impact is almost null (Bianchi et al.,2012). Consequently, the impact is too small to offset the potential welfare gains of immigration in the economy (Spenkuch, 2010).

Furthermore, Pinotti (2017) shows that migrants who receive a residence permit are less likely to commit criminal offenses as they may face major losses in engaging in crime, for example, they risk being expelled from the country. This could explain the findings of Bell et al. (2010) which reveal that, in Italy, immigrants’ arrest rates do not differ from those of natives.

Finally, the last misperception some natives have regarding migrants is that they will compete with them for the same job positions which will end up lowering the wages employers are willing to pay.

Despite this concern, economic literature has not yet reached a consensus about the labour market impact of immigration. The disagreement is related to, for example, the characteristics of both the regional and national labour market and the time it takes to adjust to the inflow of the new workers. Consequently, the short-term impact of immigration might be different from the long-run impact, and it may also differ from country to country and within a country (Edo, 2019; Piyapromdee, 2020).

However, the different effects, especially across regions, tend to rapidly dissipate (Colas, 2018). As a result, most papers find that neither low-skilled nor high-skilled migrants have a negative impact on the salaries of natives. They rather find that their impact on native wages tends to be null or even slightly positive, at least after some time for adjustment (Ottaviano and Peri, 2012; Edo, 2019).

Besides, immigrants may even bring a new set of aptitudes and ambitions which may foster innovation (Edo, 2019). As a result, many migrants become great entrepreneurs, with Elon Musk being a prominent example.

Moreover, immigrants may improve the skills of natives and boost productivity (Edo, 2019; Banerjee and Duflo, 2019). Low-skilled native workers may, for instance, improve their skills from manual to non-manual jobs; also, they may specialize in tasks which involve communication skills while immigrants may specialize in tasks requiring less interaction as they might not dominate the language of the receiving country (Banerjee and Duflo, 2019). Besides, immigrants may benefit the economy by taking jobs some natives are reluctant to perform, such as cleaning and maid services.

Therefore, natives do not necessarily compete directly with immigrants, they may complement each other.

To conclude, migrants are an essential part of our economy and community. However, to be open to the benefits of migration, natives need to understand who migrates and why people migrate. Only then can common misperceptions be defeated.

To overcome these sheer myths on migration, the media and the academic community play an essential role. By making some of the abovementioned results from economic studies more accessible to the general public, false information provided by politicians in electoral campaigns can be fact-checked. Hopefully, this could lead to less populistic views and a more inclusive community.

 by Rita Neves, MSc Economics 2020-2022

 References:

Alesina, Alberto, Miano, Armando and Stantcheva, Stefanie. (2018). Working Paper. “Immigration and Redistribution .” NBER Working Paper 24733 [Revise and Resubmit at The Review of Economic Studies].

Banerjee, Abhijit. and Duflo, Esther, Good Economics for Hard Times (Great Britain: Allen Lane, 2019), 10-50.

Batista, C., & Costa, A. I. (2018). Assessing the Role of Social Networks on Migrant Labor Market Outcomes. NOVAFRICA Working Paper Series, 1601.

Batista, Cátia and McKenzie, David. (2018) Testing Classic Theories of Migration in the Lab. https://research.unl.pt/ws/files/26626231/batista_c2249.pdf

Bell, Brian & Machin, Stephen & Fasani, Francesco. (2010). Crime and Immigration: Evidence from Large Immigrant Waves. Review of Economics and Statistics. 95. 10.1162/REST_a_00337.

Bianchi, Milo, Buonanno, Paolo and Pinotti, Paolo. (2012). Do Immigrants Cause Crime? Journal of the European Economic Association. Volume 10 – Issue 6. 1 December 2012. Pages 1318–1347. https://doi.org/10.1111/j.1542-4774.2012.01085.

Edo, Anthony. (2018). The impact of immigration on the labor market. Journal of Economic Surveys. https://doi.org/10.1111/joes.12300

Grogger, Jeffrey and Hanson, Gordon H. (2011). Income maximization and the selection and sorting of international migrants. Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May. https://doi.org/10.1016/j.jdeveco.2010.06.003.

Mäkelä, Erik. (2017). The effect of mass influx on labor markets: Portuguese 1974 evidence revisited. European Economic Review. 98. 10.1016/j.euroecorev.2017.06.016.

Mckenzie, D., & Rapoport, H. (2007). Network effects and the dynamics of migration and inequality: Theory and evidence from Mexico. Journal of Development Economics, 84(1), 1–24. https://doi.org/10.1016/j.jdeveco.2006.11.003

McKenzie, David. (2008). A Profile of the World’s Young Developing Country International Migrants. Population and Development Review, 34(1), 115-135 http://www.jstor.org/stable/25434661

Ottaviano, Gianmarco I. P., and Giovanni Peri. “RETHINKING THE EFFECT OF IMMIGRATION ON WAGES.” Journal of the European Economic Association 10, no. 1 (2012): 152-97. Accessed February 22, 2021. http://www.jstor.org/stable/41426727.

Pinotti, Paolo. (2017). Clicking on Heaven’s Door: The Effect of Immigrant Legalization on Crime. American Economic Association. https://www.jstor.org/stable/24911325

Piyapromdee, S. (2020) The Impact of Immigration on Wages, Internal Migration and Welfare. The Review of Economic Studies. 10.1093/restud/rdaa029. (In press).

Punch, Samantha and Sugden, Fraser. (2013). Work, education and out-migration among children and youth in upland Asia: changing patterns of labour and ecological knowledge in an era of globalisation. Local Environment, 18:3, 255-270. DOI: 10.1080/13549839.2012.716410

Rapoport, Hillel, Sardoschau, Sulin and Silve, Arthur. (2020). Migration and Cultural Change. CESifo Working Paper No. 8547. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3689469

Rodriguez, Oscar and Guriev, Sergei and Henry, Emeric and Zhuravskaya, Ekaterina. (2019). Facts, Alternative Facts, and Fact Checking in Times of Post-Truth. Politics Journal of Public Economics. Forthcoming. Available at SSRN: https://ssrn.com/abstract=3004631 or http://dx.doi.org/10.2139/ssrn.3004631

Spenkuch, Jörg. (2010). Understanding the Impact of Immigration on Crime. American Law and Economics Review. 16. 10.2139/ssrn.1612849.

[1] The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2019. (n.d.). NobelPrize.Org. Retrieved 26 October 2021, from https://www.nobelprize.org/prizes/economic-sciences/2019/duflo/159466-duflo-interview-transcript/

[2] Banerjee, Abhijit. and Duflo, Esther, Good Economics for Hard Times (Great Britain: Allen Lane, 2019), 10-50.

[3] What Trump has said about Mexicans. (n.d.). BBC News. Retrieved 26 October 2021, from https://www.bbc.com/news/av/world-us-canada-37230916