ECON0041 Economics Of Migration And Job Search Exam Questions And Answers 2024

Causes of migration - correct answer-New jobs Higher wages Cheaper housing Natural disaster Persecution Consequences of migration - correct answer-*Host country* - increased diversity of goods and services e.g. China town - direct effects on wages, taxes, government spending etc *Home country* - brain drain/gain - return and remittances Return migration - correct answer-Migrants return to the country of origin by their own choice after a significant period abroad Contract migration - correct answer-Migrant lives in host country for a limited number of years, where the length of migration is exogenously determined by a residence permit or working contract Transient migration - correct answer-Migrant moves across different host countries before possibly reaching a final destination Circulatory migration - correct answer-Migrants move frequently between the host and source country, they only stay for a short period in the host country e.g. harvest season Influences on net gains from migration - correct answer-- Increases with skill prices in the host country - Increases with return to human capital in host country - Moving cost - Relative skill prices and rate of increase of R Why may individuals not migrate even if there is a net gain from migration - correct answer-Non economic reasons e.g. family/amenities Non pecuniary factors e.g. weather, quality of goods Non financial costs of moving Risk aversion on future earnings Credit constraints so can't pay moving cost Length of t in return migration: ξ0 ξ1, c1 c0 - correct answer-w1 w0 Required to overcome home bias (0 = home country) Length of t in return migration: ξ0 ξ1, c1 = c0, w0 increases - correct answer-t falls Individual has greater incentive to stay at home Length of t in return migration: ξ0 ξ1, c1 = c0, w1 increases - correct answer-Ambiguous effect on t Substitution effect - as w1 increases you want to spend more time abroad Income effect - you could make more for a given unit of time, hence spend less time there and consume the same amount Roy Model: σiu 0, σeu 0 - correct answer-Implies σi^2 σie σe^2 Positive selection Highly skilled migrants leave home country Those who migrate have higher than average earnings in both host and home countries The chances of having a high wage if you are above average is greater in the immigration country as there is a higher probability mass for a given wage Roy Model: σiu 0, σeu 0 - correct answer-Implies σi^2 σie σe^2