Economics of Migration

In the world, more than 220 million individuals live in a country different from that of birth. In developed countries, foreign born individuals represent 10.5% of the population. This important factor reallocation is the result of decades of increasing globalization of labor markets. Why people migrate, who migrates where, and what are the economic impacts for the receiving economy, are important questions that have motivated a huge body of research in Economics.

The main objective of this course is to explore the different answers provided in the literature to these questions. We will start focusing on migration decisions. Understanding the motivations to migrate is important to analyze who migrates to each location. Hence, we will explore the theoretical grounds for this type of decision starting from the Roy model, and its seminal implementation in the migration context by Borjas (1987), and then we will review some empirical literature. From a very different angle, recent work in the last few years has estimated structural models of internal migration (Gould, 2007; Kennan and Walker, 2011; Buchinsky et al, 2014 among others). Internal migration decisions have specific idiosyncrasies that make their analysis worthy in a separate way. We will devote important emphasis on migration costs, available information, and the effect of internal migration in shaping local labor markets.

The second part of the course will focus on labor market impacts of immigration. First, we will explore the literature that has analyzed the impact of immigration across local labor markets. Later, we will review the literature that studies labor market impacts of immigration at the national level. All these approaches are well detailed in Borjas (2014). Two important difficulties to overcome in both cases are endogeneity of immigrant inflows and adjustments by natives, previous immigrants, and/or prospective migrants. Finally, we will study the assimilation process of immigrants in the labor market.