The Economic Geography of Cross-Border Migration

We live in the “age of migration.” Migration can take different forms: local, domestic, or cross-border (regional or international). In recent years, a considerable amount of attention has been directed to the socio-economic aspects of cross-border (interregional and international) migration (see, e.g., Stough et al. in Modelling aging and migration effects on spatial labor markets. Springer, Berlin, 2018). In the Handbook on the “Economics of International Migration” (Chiswick and Miller in Handbook on the economics of international migration. North-Holland Publishing, Amsterdam, 2015), we find many interesting economic contributions on migration phenomena, mainly from a macro- or meso-economic angle. It should be recognized, however, that migration is not only an economic or demographic phenomenon, but it also has clear geographical dimensions in terms of socio-economic drivers of, or impacts on, places of origin or destination.

The present concerns about irregular migration flows are hereby addressed in a long-term historical perspective through the lens of the topodynamic theory. Various cases of migrations and invasions that have had significant historical consequences are evoked (the fall of the Roman and Byzantine empires; the Mongol and Manchu invasions of China, etc.). The conventional thinking concerning the gears of the invasion mechanics is checked on the basis of recent facts and statistics in order to draw general conclusions.

Throughout history, border walls and fences have been built for defense, to claim land, to signal power, and to control migration. The costs of fortifications are large while the benefits are questionable. The recent trend of building walls and fences signals a paradox: In spite of the anti-immigration rhetoric of policymakers, there is little evidence that walls are effective in reducing terrorism, migration, and smuggling. Economic research suggests large benefits to open border policies in the face of increasing global migration pressures. Less restrictive migration policies should be accompanied by institutional changes aimed at increasing growth, improving security, and reducing income inequality in poorer countries.

This chapter emphasises the demographic effects that migration makes to both sending and receiving areas in terms of population change, age-sex compositions and subsequent demographic processes, such as fertility, ageing and further internal or international migration. Underlying the framework is a multiregional demographic model, which connects populations together through origin–destination migration flows. To illustrate the framework, an analysis of the role of internal migration in regional population change is presented for the Australian state of New South Wales and the Australian Capital Territory from 1981 to 2011.

Deller, Conroy, and Kures provide insights into the impact of foreign-born immigrants on communities throughout the United States by considering current trends in immigration from a historical policy perspective. The chapter also explores connections between community, social, and economic well-being and measures of immigration including the percent of the current population that is foreign born, the change in foreign-born population, and the share of foreign-born persons who are now nationalized citizens. Deller, Conroy, and Kures conclude with a detailed examination of immigration’s effect on entrepreneurship by estimating a family of models that consider the concentration of immigrants in conjunction with new business formations from the Business Information Tracking System.

Knapp and White provide a timely review of innovations in U.S. domestic migration research and its consequences for the spatial distribution of population. The authors discuss the crucial shift toward migration modeling which includes site attributes such as natural amenities in addition to factors associated with improvement in earnings in the household location decision. Knapp and White address the following contemporary topics in the study of U.S. domestic migration: migrant selectivity, the use of panel data, and life course migration. They illuminate the development of inter-disciplinary U.S. domestic migration research from economics, demography, sociology, and geography. In “Opportunity Seeking Migration in the United States,” Knapp and White conclude that the results of migration research should inform the “people vs. places” policy debate because a better understanding of the determinants of migration will lead to more efficacious public policy. The authors finally assert that changing demographics will have an increasingly important role in migration patterns and regional population dynamics, providing fruitful opportunities for future migration research regarding age group specific locational preferences.

This chapter provides a state-of-the-art literature review about research that aims to explain the return, repeat, circular, and onward migration of the highly skilled migrants around the world. After it describes the status quo in the knowledge economy and the international race for talent, it presents the relevant theories and concepts of migration in the social sciences and how these theories accommodate the phenomena of return, repeat, and onward migration. A special section is devoted to selection. The chapter then summarizes, evaluates, and juxtaposes existing empirical evidence related to theoretical predictions. Observables such as education, income, gender, and home country as well as unobservables such as ability, social capital, and negotiating skills play a strong role in influencing return, repeat, and onward migration decisions. Yet, there is no consensus on the direction of the effect. The chapter discusses shortcomings and limitations along with policy lessons. It concludes by highlighting holes in the literature and the need for better data.

While humanitarian migration is still the least commonly used channel leading to permanent residence, its increase over the last decades has raised concern about its socioeconomic impact within OECD member countries. Humanitarian migrants are often characterized by a number of factors—such as post-migration stress or the fact that they are not selected based on their human capital or skills needed in receiving labour markets—that puts them in a disadvantaged position when seeking employment in receiving countries. As one of the OECD countries with a long tradition in promoting refugees’ employment integration policies, Sweden is presented in this chapter as a case study of humanitarian migrants’ transition into OECD labour markets. With refugee integration policies and a resettlement system that date back to the late 1970s, Sweden has continued to be a major destination for asylum seekers. Like other receiving countries, refugees in Sweden have lower employment levels than other migrants on arrival. While this gap decreases over time and significant differences are also found among source country groups, the employment gap between refugees and natives persist over time.

Cross-border mobility is one of the most important factors to solidify European integration. On top of cross-border migrants, the number of cross-border commuters and posted workers has increased considerably over the past decade with important social and economic consequences. Although the effects are largely asymmetric across groups of individuals, with winners and losers in terms of wages, employment, housing and social welfare, the benefits of cross-border labour mobility in all its forms have been proven to be numerous both from a micro and a macro perspective and largely overcome the costs. However, large barriers to cross-border mobility in EU still exist, particularly in terms of lack of information on rights and opportunities, language differences, legal and administrative obstacles, and the recognition of professional qualifications. Reducing these barriers is then a key priority for the EU in order to enhance the integration process. Policy interventions should therefore aim at expanding the expected utility gains of mobility, reducing mobility costs for individuals, redistributing the benefits across groups of individuals and supporting the labour market and social integration of movers.

In this chapter, we review and advance the evidence to date on the influence of subjective wellbeing (SWB) in origin and destination countries on people’s international migration decisions. These influences are analysed in the context that they supplement, rather than replace, the influence of labour market factors as migration determinants. We use a bilateral migration data set between 102 origin countries and 14 OECD destination countries from 2006 to 2013. We show that it is not just the mean of SWB across countries that counts but also SWB inequality is a factor that influences migration flows. We find that higher SWB inequality in each of origin and destination countries increases bilateral migration flows. Further, we provide evidence that this effect is non-linear, being attenuated as income (in either country) rises. These findings have implications both for research and for policies in the field of migration.

This chapter seeks to distinguish between possible explanations for why internal migrants receive wage premiums or penalties post-migration. We use data from the Household Income and Labour Dynamics in Australia (HILDA), and individual fixed effects models to control for unobservable sorting of migrants. We decompose the return to migration into components attributable to a worker’s education versus their occupation, controlling for unobservable individual characteristics. Overall, we find that both education and occupations contribute a relatively equal amount to a worker’s return to interregional migration. When differentiated by the geography of origin and destination locations, we find that access to high-paying occupations and a higher return to education explain roughly equal shares of the return to migration for migrants who move from one major city to another. However, access occupations are the primary determinant of the wage premium received by migrants who move to remote/very remote regions in Australia.

This chapter surveys the international evidence regarding the impact of immigration on local housing markets. The theoretical framework provided highlights with the complexity of housing markets and the importance of distinguishing between the ownership and use of the stock of dwellings vis-à-vis the residential real estate market. Evidence from eight countries, and from meta-analysis shows that immigration leads to higher house prices and rents, and lower housing affordability. On average, a 1% increase in immigration in a city increases rents by 0.5–1%, the effect on prices being about double that. There is a large variance around this, related inter alia to the period, spatial scale and local economic conditions. Additionally, the housing impact of immigration depends on the demographic and economic composition of the immigrant flow, on macroeconomic conditions and expectations, on the institutional factors influencing the price elasticity of the supply of new dwellings and on how the native born react to immigration. The tendency of the native born to move from areas where migrants settle can lead to relative house price declines in these areas. Overall, immigration has been a minor contributor to sharply rising house prices in contemporary fast growing agglomerations.

Segregation occurs when individuals who identify, or are identified, with different groups occupy different geographies within cities. Although segregation can be seen as a continuum from dispersion through extreme cases exemplified by ghettos, it remains a persistent feature of cities across the globe. Immigration features prominently in segregation and reflects a range of factors including discrimination and racism, housing, labor market access, and economic opportunities. Focusing on the immigration perspective, the following chapter explores the urban geography of segregation, including its definition, causes and patterns, methods for detecting and understanding segregation, and implications of segregation.

This chapter investigates the existence of complementarities between immigrant and native workers across sectors in Italy and the effects on wages due to immigration during the period 2011–2016. The analysis is based on a production function framework, where the aggregate labor is the result of a nested-CES function, and workers are differentiated according to their educational attainment, job experience, and nationality. This approach allows the analysis to estimate the elasticity of substitution between immigrant and native workers with the same education-experience level by sector. The contribution is twofold. First, it provides an estimate of the elasticity of substitution between native and immigrant workers by sector. Second, by considering explicitly the different degrees of substitutability between immigrant and native workers, the analysis provides an estimate of the wage impact for the two groups of workers at sectoral level. We find noticeable differences in the elasticity parameters across sectors. Similarly, the wage impact of immigrant is remarkably different both across sectors and between immigrant and native workers.

Kumar and Krasnik bring together migration and health as two fundamental issues in past and present global human development. The evolution of migrant health as a discipline is traced, commencing with a focus from infectious diseases and biological/genetic differences moving towards broader health issues including chronic and mental diseases. Main concepts and theories that have dominated the field so far are presented and existing evidence on how migration affects health are discussed, including the importance of life course perspectives. The chapter explores the implications and challenges for equity in access to and quality of health care. Finally, Kumar and Krasnik discuss the recent international policy developments and recommendations for improving migrant and ethnic minority health.

This chapter analyses immigrant-native human capital gap and factors behind it in fifteen European countries. It employs a broad definition of human capital, incorporating the general human capital and the specific human capital, which refers to the task-specific abilities accumulated and developed through performing certain job tasks. The chapter conducts a twofold analysis, relying on the Programme of International Assessment of Adult of Competencies (PIAAC). Firstly, it explores immigrant-native disparities in inner abilities, measured by the literacy and numeracy skills. Secondly, the research tackles the immigrant-native gaps in on-the-job use of cognitive skills, measured by self-reported intensity of literacy, numeracy and information and communication technology skills use at work. The results indicate that immigrants face a number of disadvantages that may persist independently of their inner abilities. Immigrant-native gaps in skills use at work indicate that immigrants are not sufficiently well assimilated in the European labour markets. Therefore, an underuse of immigrants’ skills and competencies is an important dimension of the immigrants’ integration issue.

This research adopts a grounded approach to address becomings of Syrian refugees during their entrepreneurial journey into the Netherlands. This paper reveals stories of the nature of interactions between refugees and the ecosystem, with experiences of inclusive cooperation on the one hand and experiences of a more prohibitive role of the ecosystem on the other hand. Alfa-college gave access to the research population through a special 1-year program with training, intervision, coaching and networking. The research at Alfa-college reveals four controversies: Political goals versus daily practices of bureaucracy, entrepreneurship is fun versus daily practice,  using experienced knowledge of (un)successful refugee entrepreneurs versus one size fits all approach policies for enhancing entrepreneurship for migrants with a refugee background and where is success versus where do I start? Throughout the stories and controversies a liminal position from the refugees becomes apparent. The research makes an academic and conceptual contribution by highlighting to dynamics of refugee entrepreneurial journeys and barriers they experience.

A wide range of push and pull factors have been shown to influence the decisions to migrate to another country, but the effect of the quality of institutions on the origin and destination countries has received less attention than it deserves. This chapter reviews the theoretical framework and the extant empirical evidence for the importance of political and economic institutions to international migration decisions. Key aspects of this body of literature are illustrated further with an analysis of the return migration decisions of Vietnamese migrants.

Much of the literature on cross-border migration has focused on the impact of immigration on receiving countries with less attention paid to the impact of emigration on sending countries. Ghosh and Weinstein provide an overview of the push and pull factors that play a role in the decision to emigrate. The chapter draws attention to the linkages between the underlying factors that cause emigration and the impact of emigration on sending countries. Though the global impact of international migration may be positive, the efficiency gains from labor mobility are not shared equally across countries or across regions within sending countries. By specifically examining provinces across China, Ghosh and Weinstein find that, while there are short-term effects from the loss of labor and brain drain, the long-term effects accrue via emigrant networks that can promote trade, foreign direct investment and entrepreneurial activities, remittances and possibly brain gain, if emigrants return to their native country. Still, emigration in China likely exacerbates inequality between wealthier coastal provinces and inland areas. The chapter concludes with a brief discussion of the policy implications of emigration.

The potential development impacts of migrant remittances have been subject of extensive theoretical and empirical explorations. This chapter reviews the economic effects of remittances on migrants’ countries of origin, focusing specifically on how the receipts of remittances shape norms, consumption, investment and inequality at the household level, and how these household-level impacts shape country-level outcomes. The reviewed literature suggests that the effects of remittances on economic outcomes are context-specific and shaped by the heterogeneity of migrants, their motivations to migrate, and the development status and institutional settings in their countries of origin. The review of household-level studies nevertheless identifies overall positive effects of remittances on consumption more generally, and on durable goods specifically for the not-too-poor households; they also demonstrate positive effects on households’ agricultural production, household expenditures on education and physical capital investment and entrepreneurial activities. Much in line with the findings from household studies, the macroeconomic studies demonstrate generally positive effects of remittances on poverty reduction, living standards, health and education expenditures and improving institutions. Both household and macro-level studies suggest mixed results related to the impact of remittances on inequality, however, and macro studies demonstrate particularly mixed and even negative direct effects of remittances on economic growth.

In this chapter, we aim to add to the literature that looks at the link between FDI, trade, and migration. In contrast to existing studies, we consider flows of capital, trade variables, and migrants across 16 destinations and 198 origin countries over 12 years (2000–2012). We distinguish between the flow of capital (FDI) and the flow of goods and services (trade). Our results show that migration is a main driver of FDI flows in our sample. We find that for a ten percent increase in migration this year, FDI flows next year will be roughly 5.7% higher. Further, the effect of migration on imports or exports is of similar magnitude. Overall, these findings support the results in the previous literature finding that migrant networks increase capital and trade flows. Further, once we deviate from a constant-elasticity model, we do not find evidence for non-constancy in the relationship between migration and FDI. The squared migration term that we include in our regression model is insignificant. This also holds for imports. However, for exports we find evidence for a non-constant elasticity. Overall, our results highlight the importance of immigration policies as a means to increase FDI and trade flows between countries.

Given the increasing prominence of unskilled migrants with remittances moving from developing countries to developed ones, this research investigates the degree of trade freeness on their migration pattern, welfare, and income inequality. To address the unskilled migration issue, we first introduce the concept of “attachment cost,” which means that workers suffer when they leave their home countries. Second, we prove the existence of an equilibrium that unskilled workers migrate from the developing South to the developed North and send part of their wages back to support their families. Third, we examine its impacts on the welfare of each country and study the implications of the migration policy. We find that when unskilled migration is allowed, the welfare of both countries improves. Also, the lower the attachment cost of the unskilled migrants is, the higher the incentive for members of each household in the South to migrate to the North. Moreover, the real wages of both entrepreneurs and unskilled workers in the North also rise. Finally, the trade liberalization deepens (eases) income inequality between entrepreneurs and unskilled workers within the North when the remittances sent back are sufficiently large (small).

Place-based policies in large and persistently lagging regions face many challenges. Persistently lagging regions may require such large investments to reverse a downward trend as to be politically infeasible. In regions that have become economically obsolete, place-based policies cannot be justified by appealing to economic efficiency, unless problems are due to market failures. It may, however, be possible to justify policies on social or political grounds, as is the case with the EU’s cohesion policies. Migration as an economic adjustment mechanism has an ambiguous effect on lagging regions. Because the young and skilled are most likely to find success elsewhere, it often results in the loss of emerging economic, civic, and political leadership. The disproportionate loss of young people also causes demographic disequilibria that reduce prospects for recovery. The long-term stagnation of four West Virginia counties in a region that benefits from place-based federal policies, illustrate the challenges.

This paper studies the role of cultural differences on the choice of migrants’ destination country. In order to examine this issue, we run two separate analyses using data on international migration flow from the Organization for Economic Cooperation and Development statistics and data on international migration stock obtained from the Integrated Public Use Microdata Series International. Cultural differences between the home and host countries are measured for observable characteristics that reveal fertility, marriage, and employment cultures among others. Results show a negative and statistically significant relationship between cultural differences and migration flow. This relationship varies when the physical distance is considered pointing to a nonstatistically significant effect of cultural differences for migration flow among bordering (neighboring) countries. Interestingly enough, in the analysis of migration stock, we detect that cultural differences matter in the location decision depending on whether individuals reside in bordering (or quite close non-bordering countries) or non-bordering countries. Our findings suggest that cultural differences play a role in the destination country choice while trying to mitigate the cultural dilemma in migration.

Globalization has not, of course, ceased, but it is increasingly being opposed by powerful counteracting forces making for a localization of economic and political processes—notably (i) the slowdown or reverse of economic globalization; and (ii) the rise of aggressive forms of ethnic nationalism. It is reasonable to expect that these developments will (through, for example, the hardening of national borders and a lower tolerance of ethnic diversity) have a downward impact on cross-border migration flows. Two further fundamental changes, however, seem likely to add to this downward pressure on international migration: (i) the probable transfer to the international sphere of the widely experienced falling rates of internal migration; and (ii) the shift in global wealth and power from west to east, that is, from societies that have histories and cultures rooted in high mobility (settler societies like the United States) to those rooted in low mobility (settled societies like China). These four arguments together form a firm basis for anticipating that ‘the age of migration’ is already now, or is likely to be in the near future, a ‘thing of the past’.