Economics of Migration Class Test Exam With Complete Solutions 2024

Definition of international migration - correct answer-International migration is the movement of people across national borders Country where immigrants are from=origin Country where immigrants are going= destination Trends in International Migration - correct answer--The total number of migrants has more than tripled since 1965, reaching 243.7 million in 2015 -As a proportion of the world's population, the migrant stock grew more modestly from 2.3% to 3.3%. -As a proportion of the population, the migrant stock grew rapidly only in Europe, North America and Oceania -Today's migrant-to-population ratio in the US has not yet reached its all-time high -immigration to the U.S used to be European dominated, with a shift around 1970 to migrants coming predominantly from Latin America and Asia -Immigration to the OECD is becoming more skilled Top countries of origin - correct answer-1. Mexico (12,930,000) 2. India (11,810,000) 3. Russia (11,260,000) 4. China (8,440,000) 5. Bangladesh (6,480,000) Top destination countries - correct answer-1. United States (42,810,000) 2. Russia (12,270,000) 3. Germany (10,760,000) 4. Saudi Arabia (7,290,000) 5. Canada (7,200,000) Immigration to the U.K - correct answer--Net immigration to the UK is increasing since the early 1990s, starting from outside the EU to within the EU Where migration tends to occur - correct answer-Migration occurs more regionally, but even more internally Push factors - correct answer-conditions that propel people to leave the origin country (exps: economic (high unemployment, poverty), Political and social (discrimination, war, oppression), other (climate change, famine)) Pull factors - correct answer-conditions that entice people to enter a destination country (exps: economic (demand for labor, high wages), Political and social (family, rights and freedoms), other (amenities) What fundamentally matters to potential migrants? - correct answer-difference between countries, or differences in net economic advantages Simple model for immigration decision - correct answer--Earnings in each country are given by the (country-specific) wage (w't') times the employment probability (e't') t=time period -Migration induces one-time costs C that are paid up-front -Individual will retire after T periods -Discount rate equals δ Person decides to migrate when -C + summation [(w* x e*)/(1 + discount rate)] > (summation [(w x e)/(1 + discount rate)] *=figure in destination country all figures with t time period Meaning of simple model - correct answer-Migration is an investment decision with all migrants bearing some migration costs up front to increase their future income Why are there so few international migrants - correct answer-Increasing global income differences and stated migration intentions should generate very large migration flows in the absence of migration costs. However the much more moderate migration flows (3.1% of world population are migrants) that we observe imply large migration costs Monetary migration costs - correct answer-passport, visa, transportation, smuggler Non-Monetary migration costs - correct answer-leaving friends and family behind and adjusting to a new language and culture abroad (sometimes even death) -Common language and networks reduce migration costs -Restrictive immigration policies can be thought of as increasing migration costs -Economists often use distance as a proxy for migration costs The gravity model - correct answer-Helps describe how many people are prone to migrate M= c[(POPo POPd) / (d)] M=Volume of migration between origin and destination c=constant POPo, POPd= population of origin and destination Estimating the gravity model in regression - correct answer-log