Labor immigration and long-run welfare in a growth model with heterogenous agents and endogenous labor supply

This paper examines the consequences of labor immigration in an OLG economy in which agents have an elastic labor supply and differ with respect to degrees of altruism and rates of time preference. It focuses on three substantive questions. First, how do immigrants influence the bequest motive of altruistic natives? Second, what impact do immigrants have on the labor supply of natives? Finally, how does immigration affect the long-run welfare of both altruistic and non altruistic natives? Received: 25 November 1999/Accepted: 07 April 2000     

Child Poverty Among Hong Kong Ethnic Minorities

This paper analyzes the data from the Population Census of 2011 to identify the characteristics of poor ethnic minority groups in Hong Kong and the factors that are associated with child poverty among these ethnic minorities. The results show that the child poverty level varies between different ethnic groups and that ethnic minorities from developing nations are likely to have a higher poverty level. In particular, Pakistani children have the highest poverty rate among all ethnic groups. The results also show that Pakistani, Nepalese, and Mixed (Chinese and Asian) nationalities have a higher child poverty rate than that of Chinese individuals who constitute the majority of the Hong Kong population. The main reason for this is that, unlike their Chinese counterparts, some of these ethnic minority households have not benefited from their own human capital or their length of exposure in the local society in Hong Kong. And even if they have benefited, the positive impact of these factors on ethnic minority households was much weaker compared to that of Chinese households. These results suggest that ethnic minorities need to be categorized as a separate group in order to assess their specific needs, and assimilation policies, especially support on Chinese language learning, need to be an integral part of the government’s poverty reduction strategy to reduce child poverty among ethnic minorities.     

Divergent Patterns in the Ethnic Transformation of Societies

The uneven timing of the demographic transition in different countries of the world will lead to divergence between countries in ethnic and religious homogeneity. Developed‐country populations that began their fertility transitions relatively early are becoming increasingly diverse with respect to the ethnic origin and religion of their inhabitants, primarily as a result of high recent levels of immigration. Many demographic patterns of the developed world, such as low death and birth rates, are becoming universal. It might be expected that less developed countries will also turn from emigration to experiencing immigration, as their populations age and their economies develop. This essay suggests, however, that future ethnic diversity arising from immigration may be less marked in many of those developing countries than in the West, especially among latecomers to the fertility transition. Five reasons are advanced as impediments to the globalization of ethnic heterogeneity arising from immigration: demographic, economic, political, and factors related to resource constraints, and climate change. The essay considers what social, economic, and political consequences might arise if high levels of ethnic diversity, and possibly ethnic replacement, remained an idiosyncratic peculiarity of today's developed countries, which would therefore diverge in important ways from the rest of the world as the twenty‐first century unfolds.     

The effects of gender control on fertility and children's consumption

Effects of sex preference on investments in children‘s human capital, bequests and fertility are studied, with and without sex selection, in a model based on parental altruism. Both pure sex preference, a feature of the parental utility function, and indirect preference, which arises from gender-related differences in earnings opportunities, are examined. When there is no gender control the impact of pure sex preference is seen in smaller consumption for daughters than for sons. However, when gender control is exerted, sex preference raises the sex ratio and it is possible that sisters may, on average, consume no less than their more numerous brothers. In an example of the model with specific functional forms, parents who practise gender control have larger families than if sex selection techniques were unavailable. The effect is magnified if sons‘ earnings opportunities are better than daughters‘. JEL classification: D11, J13, J16 Received August 31, 1995 / Accepted May 2, 1996     

The economic determinants of ethnic assimilation

A human capital model is developed that distinguishes between ethnic-specific skills (applicable only to a specific indigenous or immigrant group) and shared or general skills. An important determinant of assimilation is the extent to which these two forms of human capital are complements, thus promoting both assimilation and ethnic persistence, or anti-complements, promoting either assimilation or ethnic retention but not both. Implications of the model are developed for various applications including intermarriage, the effects of group size, language and religion as a basis for ethnic mergers, and the transfer society as a potential barrier to assimilation.

A model on the escape from the Malthusian trap

We consider a demoeconomic model where output is produced using physical capital, human capital and technology as inputs. Human capital depends on the number of people and the level of education in the economy. The dynamics of labour, physical capital, education and technology are endogenously determined such as to reflect the interdependence between economic and demographic factors. The longrun path of the economy and in particular the possibility to escape the Malthusian trap crucially depend on technological progress, which provides for economy wide increasing returns to scale. The build up of technology is positively related to the stock of human capital. Our model predicts that positive population growth is sufficient to escape the Malthusian trap. Received: 22 August 1996 / Accepted: 11 December 1997     

Ethnic diversity and well-being

This paper investigates how ethnic diversity, measured by immigrants’ nationalities, influences the well-being of the host country. Using panel data from Germany from 1998 to 2012, we find a positive effect of ethnic diversity on the well-being of German natives. Our finding is robust to alternative definitions of ethnic diversity and to the non-random selection of natives and immigrants into regions. The positive effect of ethnic diversity is stronger for immigrant groups that are culturally and economically closer to Germany. Consistent with this result, we document the existence of two mechanisms explaining the influence of ethnic diversity on well-being: productivity—as captured by immigrants’ skills and assimilation—and social capital—particularly in relation to the creation of a multicultural environment.     

The Impact of Social Expenditure on Attitudes Towards Immigration in Europe

There is a growing body of literature dealing with the causes behind anti-immigrant sentiment and xenophobia. Based on the literature on the fiscal burden model, this paper contends that the differences in attitudes toward immigration, between low and high statuses, can be explained by the size of the welfare state. We argue that the impact of socio-economic status on attitudes toward immigration is larger in countries where social expenditure is high. Since a potential increase in the number of welfare recipients due to new immigrants might lead to a reduction in per capita transfers, low-income individuals in these countries are expected to be more concerned about the effect of immigration on social benefits. Using multilevel models and data from the European Social Survey we have found that while the effect of socio-economic status on attitudes toward immigration is positive there is a great deal of variation between countries. The difference in attitudes between high and low socio-economic statuses increases as social expenditure increases. Moreover, increases of social expenditure in the short run increases anti-immigrant sentiment as it raises concerns about the impact of immigration on welfare services.     

Should the US have locked heaven��s door?

This paper examines the economic impact of the second great immigration wave (1945–2000) on the US economy. Our analysis relies on a computable general equilibrium model combining the major interactions between immigrants and natives (labor market impact, fiscal impact, capital deepening, endogenous education, endogenous inequality). Contrary to recent studies, we show that immigration induced important net gains and small redistributive effects among natives. According to our simulations, the postwar US immigration is beneficial for all natives cohorts and all skill groups. Nevertheless, the gains would have been larger if the US had conducted a more selective immigration policy.     

Immigration, integration and fiscal sustainability

Economic theory points out that immigration of even low-skilled immigrants may improve public finances in Western welfare states, and it is sometimes suggested that fiscal sustainability problems in Western countries caused by ageing populations could be solved by increasing immigration. We examine consequences of various immigration scenarios using the large-scale computable general equilibrium model Danish rational economic agents model describing the Danish economy. It turns out that increased immigration will generally worsen the Danish fiscal sustainability problem. Improved economic integration of immigrants and their descendants, however, may alleviate the problems of the public sector considerably. Responsible editor: Klaus F. Zimmermann     

Immigrant skills and ethnic spillovers

This paper investigates the hypothesis that ethnicity has spillover effects on the human capital accumulation process. It extends previous research by documenting the extent to which the relative importance of parental inputs and ethnic spillovers in the intergenerational transmission of skills differs both within and across immigrant and U.S.-born ethnic groups. Using data drawn from the General Social Surveys, the study documents that the second and third generations (i.e., the children and grandchildren of immigrants) experience relatively more rapid economic advancement than do other generations, and that ethnic spillovers play a stronger role in households which are at the extremes of the skill distribution.Professor of Economics, University of California at San Diego, and Research Associate, National Bureau of Economic Research. This research was supported by grants from the Russell Sage Foundation and the National Science Foundation (Grant no. SES-9121538).     

The migration challenge for PAYG

Immigration has been popularised in the economics literature as a tool that could be used to balance troubled PAYG pension systems. Pivotal research by Razin and Sadka shows that unskilled immigration can overcome the pension problem and, further, boost the general welfare in the host economy. However, a large strand of current economics research is engaged in identifying mechanisms through which unskilled immigration, while solving the pension problem, is causing undesired shifts in general welfare. This work shows that recurring unskilled immigration will not only reduce the general welfare but may also be challenging the pension system by reducing the pension benefits themselves. Further interpreting the actual data, it is suggested that immigration policies are designed either based on public finances only or in a political environment of gerontocracy.     

Asian Americans: diverse and growing

This bulletin analyzes the demographic, socioeconomic, and political characteristics of the Asian population in the US. During 1980-90, the Asian population doubled in size to 4% of total population. The Asian population is expected to double again in 20 years. The number and diversity of Asian ethnic groups has increased due to immigration. The proportion of Japanese, Chinese, and Filipino persons declined from 96% of Asians in 1970 to over 50% in 1997. Indians, Vietnamese, and Koreans outnumber Japanese ethnic groups in the US. Intermarriage is higher among US-born Asian Americans than foreign-born Asian Americans. Intermarriage is greater among female US-born Asian Americans than male US-born Asian Americans. The future size of the Asian population will depend upon how the children of these intermarriages identify themselves ethnically. Asians have advanced themselves educationally. In 1997, 42% of Asian Americans aged 25 years and older had a college or professional degree, compared to 26% of non-Hispanic Whites, 13% of Blacks, and 10% of Hispanics aged 25 years and older. Families with income below the poverty level, in 1996, amounted to 12.7% of Asians, compared to 26.4% of Hispanics, 26.1% of Blacks, and 6.5% of Whites. In 1990, over 43% of foreign born Asian Americans aged over 18 years were naturalized citizens, compared to 33% of all foreign-born residents. Asians have low rates of voter participation, but high rates of naturalization suggest greater political participation in the future. In Presidential 1996 elections, Asians tended to register as Republican, but voted Democratic.     

Comparative labor market performance of visaed and non-visaed migrants: Pacific islanders in Sydney

Using survey data for Tongan and Samoan migrants in Sydney the effects of visa restrictions on labor market performance of migrants are assessed. Univariate analysis suggests a positive association between unemployment and the unrestricted entry of Samoan step-migrants from New Zealand. A probit model of the determinants of unemployment is estimated with controls for human capital and demographic variables. While human capital endowments are important, visa restrictions do not have a significant effect on either group‘s employability. Implications for policy are discussed highlighting the complementarities between host country immigration policies and foreign aid programs. Received: 13 August 1997 / Accepted: 5 March 1998     

人口转型与经济发展阶段的演进

伴随工业化进程的一个典型化事实是人口生产由数量偏好向质量偏好的转型。正是这一人口转型,带来了传统经济和现代经济的划时代存在,也区分了工业化经济取代传统经济和现代经济超越工业化经济的工业化两个阶段。需要强调的是,没有人口转型形成的人力资本内生化机制,不可能有工业化高级阶段的推进和现代化的完成。人口转型的经验事实表明,中国经济发展已进入加速现代化进程的新阶段。     

Education and income inequality: The role of a social protection system

In this paper we aim to understand the role a welfare state can play in stimulating risky but profitable activities like investment in education, and in reducing income inequality. We analyze how unemployment benefits may affect investment in education when the latter is characterized by uncertain returns. This is done in an overlapping generations model in which endogenous growth is introduced through human capital accumulation. We develop a numerical example of the model in order to reproduce some key differences between the European versus the North American economy; differences that, according to this model, result from the different degree of social protection characterizing both economies. Received: 02 June 1999/Accepted: 22 February 2000     

Assimilation of immigrants: Implications for human capital accumulation of the second generation

Immigrants assimilate in various dimensions at different rates. Moreover, in each of these dimensions they assimilate at rates that may differ from those of their children. The purpose of this paper is to examine how the pace of assimilation of immigrants in various dimensions affects the rate of human capital accumulation of immigrant children. It is argued that rapid assimilation in certain dimensions serves to increase the rate of human capital accumulation of the second generation, while in other dimensions it may have the opposite effect.I thank Christoph Schmidt, Peter Schaeffer, and two anonymous referees for helpful comments. Responsible editor: Christoph M. Schmidt.     

Immigration Selection and the Educational Composition of the US Labor Force

Immigration policy is often viewed as an important regulator of the flow of labor and human capital into the labor market. In the US context, this perspective underlies efforts to raise the educational levels of newly admitted US immigrants, which has been proposed through a variety of mechanisms. Yet it remains unclear whether and under what circumstances such changes would significantly raise the educational level of the US labor force. We use a microsimulation model to evaluate the effects of various policy proposals that would seek to admit more highly educated immigrants. Results suggest that adopting a Canadian-style admissions policy that explicitly selects immigrants based on educational attainment would lead to a better educated labor force, especially among immigrants and their descendants. Eliminating all unauthorized immigration or family reunification and diversity admission categories, however, would have minimal impact. Additionally, the effects of all policy scenarios on the educational composition of the entire labor force are likely to be modest and would be conditional on the continuation of intergenerational mobility and high levels of immigration.     

Immigration and product diversity

We study the effects of immigration on the diversity of consumption choices. Data from California in the 1990s indicate that immigration is associated with fewer stand-alone retail stores and a greater number of large and in particular big-box retailers—evidence that likely contradicts a diversity-enhancing effect of immigration. In contrast, focusing on the restaurant sector for which we can better identify the types of products consumed by customers, we find that immigration is associated with increased ethnic diversity of restaurants. This latter effect appears to come in part from the comparative advantage of immigrants in the production of ethnic goods.