Differentiation of capital and international labor migration: constructing a working hypothesis

Various studies on trends in international labor migration are first reviewed. A hypothesis is then constructed to explain international labor migration in terms of the differentiation of capital. An important distinction is made between the oligopoly capital and non-oligopoly capital of industrialized countries (core states): non-oligopoly capital needs migrant workers, whereas oligopoly capital tends to go abroad and employs the labor it needs in less developed countries (peripheral states). The hypothesis is tested using data for European industrialized and semi-industrialized countries. Suggestions for further research projects are given.     

CAPITAL MARKET IMPERFECTIONS, LABOR MARKET DISEQUILIBRIUM AND MIGRATION: A THEORETICAL AND EMPIRICAL ANALYSIS

Traditional analyses of the determinants of migration in less developed countries have focused on labor market conditions. This paper adapts a simple model to show that capital market conditions may be an important factor in individuals' migration decisions. Data from Ecuador are used to test this model, and the empirical results confirm the role of capital market imperfections—chiefly caused by financial repression—in shaping migration flows. Traditional labor market factors still matter, but the new finding may provide policy makers with new and lower-cost tools with which to affect migration outcomes.     

Labor immigration and capital flows: long-term Australian,Canadian and United States experience

"Evidence on labor immigration and capital inflows to three high labor-immigration economies (Australia, Canada, the United States) is examined over periods ranging from 1820-1870 through to 1991. Data show a close association between capital flows and immigration, although causality implications are ambiguous. For the United States, the relation between factor flows is more complex than for the other countries, but flows to the United States have influenced those to smaller economies. All three nations have been subjected to common immigrant push factors through to 1930-1950 but, since World War II, linkages between factor flows have altered. Post-World War II U.S. immigration restrictions have become more important as a global determinant of labor flows, with factor flow policymaking becoming increasingly internationally interdependent."     

The Mobility of Entrepreneurs and Capital: Taiwanese Capital-Linked Migration

Much of the literature concerning international investment focuses on the movement of capital or trade flows and does not cover the persons who migrate with the capital, even though in a globalizing economic system new conditions emerge for the international migration of capitalists. On the one hand, capital owners have been recruited directly by business migration programmes in countries such as Canada, Australia, and the US. On the other hand, global economic restructuring, one part of which entails increasing foreign direct investment from a wider range of countries, has induced the migration of an entrepreneurial/managerial class. This article analyses the relation between the mobility of capital and of entrepreneurs by investigating Taiwan's capital-linked migrations. It aims to show that people can integrate migration and capital investment as a strategy to best serve their interests. Although their moves are mediated and constrained by different migration channels (governmental policies, recruitment agencies, transnational corporations, etc.), capital-linked migrants are not passive players in international migration systems. They actively position themselves with regard to migration channels and select active strategies that best suit their objectives. Sometimes immigration serves capitalists' interest in capital accumulation, at other times capital investment serves as the means for securing a second nationality. In this way, Taiwanese capitalist mobility has been incorporated into the open-ended logic of flexible capitalism itself. Such understanding of the processes of capital-linked migration and its implications contribute to new theories of the relationship between international flows of capital and international migration.     

European integration and external sustainability of the European Union: an application of the thesis of Feldstein and Horioka

The Feldstein–Horioka thesis was considered one of the greatest puzzles in economics. Formulated to measure international capital mobility, it has known a process of immunization to be conformed to empirical evidence and respect econometric knowledge. We apply to EU countries a formulation of this thesis which is adequate to test external sustainability and measure international capital mobility. Applying appropriate econometric methods we can accept the hypothesis of external unsustainability for the EU before the enlargement. The enlargement allows the external sustainability of the new EU. The lesser mobility of capital in the countries of the enlargement must be considered as a positive shock on EU industry of financial services.     

THE WELFARE COSTS OF DEFICIT FINANCE

We analyze the welfare consequences of deficit finance in a general equilibrium model fit to the US. economy. Current spending may be financed with current and/or future distortionary taxes. The economy is open to international capital flows. The welfare costs of financing marginal current spending are substantial and are sensitive to the timing of the required taxes; postponing a tax on labor income is advantageous but postponing a tax on asset income is not. Ricardian equivalence poorly approximates the economy we consider.     

Social Influences and Aggregated Immigration Dynamics: The Case of Spain 1999–2009

This research aims at broadening the applicability and scope of network‐based explanations of international migration to include explanations of aggregated immigration dynamics for multiple immigrant collectives. Using a unique dataset that contains data on approximately 4.5 million international immigration events from 180 different origin countries in Spain between 1999 and 2009, my analysis shows conclusively that information about changes in the supply of immigrant social capital between past and potential immigrants explains the variation in local immigration rates in the destination society. It also show that incorporating information about such social network influences is very informative when the goal is to explain (1) temporal variation in intra‐collective international immigration flows across different locations in the destination, (2) temporal variation in inter‐collective international immigration flows within a specific location in the destination, (3) intra‐collective differences in international immigration across locations in the destination, and finally (4) inter‐collective differences in local international immigration within the same geographical location in the destination.     

Making the Poor Pay for the Rich: Capital Account Liberalization and Reserve Accumulation in the Developing World

Since the 1990s emerging market and developing countries (EMDCs) have been accumulating massive amounts of international reserves. The fundamental factor behind this reserve hoarding is financial in nature rather than trade-related, stemming from the widespread adoption of capital account liberalization in EMDCs, the resulting exposure to heightened financial volatility, and the consequent need to accumulate reserves as a self-insurance against potential disruptions in capital flows. Precautionary reserve hoarding, however, follows a circular logic that not only imposes heavy opportunity costs on EMDCs but also defeats the very purpose of capital account liberalization. When EMDCs accumulate reserves to hedge against capital account shocks, they are essentially recycling privately incurred short-term capital inflows into publicly incurred capital outflows, engaging in a reverse carry-trade that neither makes any economic sense nor results in any net transfer of financial resources from abroad. The net effect of this circular logic behind financial openness and precautionary reserve accumulation is a regressive and inequitable shifting of the costs of financial volatility from richer to poorer countries.     

Agricultural development and emigration: rhetoric and reality

"The untested premise of trade liberalizing U.S. development programs such as the Caribbean Basin Initiative is that commodity trade can substitute for international labor migration. Analysis of U.S. tomato producing regions in Sinaloa, Mexico and Florida suggests that the effect of trade liberalization on international labor migration is uncertain." The emphasis is on how such development projects might affect the flow of illegal migrants to the United States.     

后危机时代上海利用外资方式创新路径分析

面对后金融危机时代国际资本流动中的不确定性,上海必须重新审视自身的发展道路,及时调整战略和策略,积极开拓利用外资的新渠道和新形式。引导外资以并购方式参与上海国资国企改造、带动民营经济发展并推动经济结构调整;推进相关立法进程,引导私募股权投资发展;加快风险投资发展,促进上海高新技术产业化;有序扩大资本市场利用外资;积极争取外国政府及国际金融机构贷款等,将是上海在后危机时代创新利用外资方式的重要途径。     

International Tax Competition: A Case for International Cooperation in Globalization

The liberalization of international financial flows and foreign direct investment has induced countries to use diverse measures to attract inflow of foreign capital and foreign direct investment, which is expected to have a positive effect on the growth of GDP and thus a positive effect on social welfare. Tax exemption, reduction of tax rate, tax holiday, or diverse subsidies are some of the most important measures used. In this paper we study international tax cooperation, i.e., countries change and especially reduce tax rate for corporate income or for asset revenues to attract inflow of foreign direct investment. Both theoretical and empirical studies have shown the sensibility of foreign direct investment decision with respect to tax rate differences between home countries and host countries. In general, more inflow of foreign direct investment can be expected if the tax rate of the home country is lower than that of foreign countries. This is the main reason for international tax cooperation. In this paper we propose a simple model to prove the sub-optimal Nash non cooperative solution in a two-country tax-competition game. The model shows that international tax cooperation can improve welfare of the participating countries. How to reach a cooperative solution for an international tax competition game (ITCG) is therefore an important issue for further discussions and studies. International institutions can play a crucial role to reach international tax cooperation or international tax harmonization.     

On the links between globalization and poverty

This article surveys the evidence on the linkages between globalization and poverty, drawing on a new NBER study that has been completed under the direction of one of the authors. We focus on two measures of globalization: trade and international capital flows. Past researchers have argued that global economic integration should help the poor since poor countries have a comparative advantage in producing goods that use unskilled labor. Our first conclusion is that such a simple interpretation of general equilibrium trade models is misleading. Second, the evidence suggests that the poor are more likely to share in the gains from globalization when there are complementary policies in place.Third, trade and foreign investment reforms have produced benefits for the poor in exporting sectors and sectors that receive foreign investment. Fourth, financial crises are very costly to the poor. Finally, the collected evidence suggests that globalization produces both winners and losers among the poor. The fact that some poor individuals are made worse off by trade or financial integration underscores the need for carefully targeted safety nets. We conclude the article by identifying a number of unanswered research questions regarding the impact of globalization on poverty.     

HOW DOES GLOBALIZATION AFFECT THE IMPLICIT TAX RATES ON LABOR INCOME,CAPITAL INCOME,AND CONSUMPTION IN THE EUROPEAN UNION?

This article analyzes the effects of globalization on implicit tax rates (ITRs) on labor income, capital income, and consumption in the EU15 and Central and Eastern European New Member States (CEE NMS). We find supportive evidence for an increase in the ITR on labor income in the EU15, but no effect on the ITR on capital income. There is evidence of convergence in terms of the ITR on consumption, as countries with higher than average ITR on consumption respond to globalization by decreasing their tax rates. There are important differences among the welfare regimes within the EU15. Social‐democratic countries have decreased the tax burden on capital, but increased that on labor due to globalization. Globalization exerts a pressure to increase taxes on labor income in the conservative and liberal regimes as well. Taxes on consumption decrease in response to globalization in the conservative and social‐democratic regimes. In the CEE NMS, there is no effect of globalization on the ITR on labor and capital income, but we find a negative impact on the ITR on consumption in the CEE NMS with higher than average ITR on consumption. (JEL H23, H24, H25, F19, F21)     

The world economic system and international migration in less developed countries: an ecological approach

This study examines net migration in less developed countries (LDCs) within the context of a world economic system and an urban ecological framework. Data are obtained from the "1987 World Development Report," the "1983 and 1987 World Bank Tables," and the 1984 UN Demographic Yearbook. It is posited that international migration is a direct response to the changes in the ecological subsystems in LDCs. The framework of this analysis relies on analyses by Sly and Tayman that found in multi-equation models that migration was a demographic response to environmental conditions created by organization and technology. The maximum likelihood estimates derived from the proposed structural model indicate that net capital flows positively influence net migration rate directly. Large transfers of capital were associated with net migration. It is suggested that a reduced percentage in the labor force in agriculture may have a greater impact on emigration than wages or social disadvantages. Gross national product had a smaller impact on migration than net capital outflows. Exports had a positive impact on net migration. There was a direct negative effect of value added to manufacturing on net migration, and the direct negative effect was greater than the positive indirect effect. The percentage of persons economically active had a positive impact on net migration. Increased economic activity was related to increased emigration. The evidence suggests that world economic systems did have an impact on emigration, when profits were not invested in domestic economies of LDCs. Findings suggest that the value added to manufacturing, the percentage engaged in agriculture, and the economically active population mediated the impact of trade on net migration.     

Global Capital and Labor Internationalism in Comparative Historical Perspective: A Marxist Analysis

Labor internationalism has historically developed in response to the increasing globalization of capital, but economic factors in themselves do not provide a sufficient explanation for the relative success of international solidarity in specific geographical and historical contexts. In the past, movements of international solidarity have tended to coalesce where inclusive class-based mobilizations in individual countries have polarized local class conflicts in ways that suggest a convergence of working-class interests on the international plane. As an emergent strategy of economistic labor organizations in various sectors of the capitalist world economy, however, internationalism may in fact promote the politicization of economic trade union struggles and thus catalyze broader levels of class solidarity and unity on the national and local planes.     

FOREIGN DIRECT INVESTMENT AND COUNTRY‐SPECIFIC HUMAN CAPITAL

This paper exploits an international bilateral data set over the period 1963–1998 to investigate the relationship between foreign direct investment (FDI) and foreign‐educated labor in an FDI host country. Workers educated abroad acquire country‐specific human capital that is more productive in the host country of study. A foreign subsidiary sharing a parent firm's technology will invest more if it has more foreign‐educated labor, since it can utilize this labor more productively because of the country‐specific human capital. Consistent with our predictions, our empirical findings show that foreign‐educated labor accounted for a sizable portion of growth in FDI flows. (JEL F21, F10)     

The causes of international labor migrations--a demand-determined approach

The author first studies the reasons why people migrate using a neoclassical approach concerning income differentials. He tests this approach empirically and demonstrates its limits. A demand-determination approach based on human capital theory is then outlined to overcome these limits and to take into account restrictive immigration controls. Migration from Italy, Spain, Greece, Portugal, and Turkey to the European Community destination countries is examined. It is concluded that "the demand for immigrants in the destination country is the decisive condition for the phenomenon of international labor migration, and the supply of migration-willing workers is only a necessary condition."     

Reattraction of needed skills to developing countries of origin

This research note briefly outlines International Labour Organization concerns about return migration in developing countries, research being done in the field, and activities in related fields. Attention is being focused on the following topics and areas of study: 1) recommendations and conventions which cover workers generally and migrant workers particularly; 2) measures to avoid the departure of skilled workers from developing countries; 3) special problems encountered in improving migrant professionals' working conditions; 4) developing a central pool of information on labor markets and employment at the international level; 5) bilateral or multilateral migration agreements to optimize the flows of health personnel, scientific workers, engineers, and high level technicians, protecting their rights, and facilitating their reintegration into the country of origin; 6) creating a compensation scheme for skill outflows and training substitutes to fill the gaps left behind by migration; 7) classifying migratory policies adopted by developing countries; 8) reattraction of needed skills to developing countries of origin; 9) transfer of know-how through expatriate nationals; 10) labor reinsertion patterns of migrants returning to Greece, Italy, Portugal, and Spain; 11) Socioeconomic reintegration of migrants returning to Pakistan and Uruguay; and 12) Sri Lanka's experience with self-employment schemes for returned migrants.     

Aspects of occupational mobility and attainment among immigrants in Australia

The occupational distributions of the native-born and foreign-born in the Australian labor market differ greatly. The disparity between the occupational distributions is greatest among the middle age-bracket, and among immigrants from Eastern Europe and the Mediterranean region. Analysis of occupational attainment using unit record data from the 1981 Census shows that as duration of residence in Australia lengthens, the occupational distribution of the overseas-born converges toward that of the Australian-born. Moreover, birthplace groups differ in the degree of upward mobility associated with length of residence in Australia: immigrants from non-English-speaking countries tend to make greater occupational advances than their counterpart from English-speaking countries. This suggests a higher degree of international transferability of human capital skills among immigrants from English-speaking countries. The analysis also highlights the concentration of immigrants from non-English speaking countries in low-ranked occupations, and the relatively minor influence of education on the occupational attainment of immigrants from these birth place regions.