Media Briefings

EFFECTS OF MIGRANT ‘SELF-SELECTION’ ON SENDING AND RECEIVING COUNTRIES

  • Published Date: April 2014

EFFECTS OF MIGRANT ‘SELF-SELECTION’ ON SENDING AND RECEIVING COUNTRIES: Evidence on US immigrants from 1880s Norway and 2000s Mexico

Because 10 million emigrants are less skilled than the average Mexican, the country’s GDP per capita is 1% higher than it would otherwise be. That is one of the findings of research by Costanza Biavaschi and Benjamin Elsner, to be presented at the Royal Economic Society’s 2014 annual conference.

 

The researchers estimate the impact on sending and receiving countries of migrant self-selection – the fact that people who emigrate are not like the average person who stays in their home country, sometimes being more skilled than the average as with emigrants from 1880s Norway and sometimes less skilled as with 2000s Mexicans.

 

The authors compare average incomes under the observed migration patterns from Norway and Mexico in those periods with a simulated scenario, in which the skills of the migrants resemble those of the home population, while the number of migrants remains constant. Among the findings:

 

·          Migrant selection decreased Norwegian GDP by 0.3%,

 

·          Migrant selection increased Mexican GDP by almost 1% – this change is as large as the difference in GDP per capita between zero migration and the current level of migration.

 

·          The impact of migrant selection was close to zero in the United States, the receiving country in both cases.

 

The authors comment:

 

‘Overall, our results suggest that it matters who migrates, but only for the sending countries, and only under certain conditions.

 

‘Unless the level of immigration is much larger than it is today, migrant selection has no impact on GDP per capita in the receiving countries.’

 

More…

 

Migrants from most sending countries around the world differ from the average person in these countries. This study examines whether this difference matters, and for whom.

 

The researchers consider the mass migration waves from Norway to the United States in the nineteenth century, and from Mexico to the United States in the late twentieth century.

 

The impact of migrant selection on welfare is close to zero in the United States. It has no aggregate consequences that Mexican migrants are negatively selected from the Mexican population.

 

The study finds a significant impact of migrant selection on the Mexican economy. Because 10 million emigrants are less skilled than the average, Mexican GDP per capita is 1% higher than it would otherwise be.

 

Migrants are different from the average – but does it matter?

 

Migrant self-selection – the question of who migrates and who doesn’t – is one of the most fundamental issues in the study of migration and often appears in the political discussion on skill-selective migration policies. But despite the vast evidence of the existence of migrant self-selection, its consequences are far from clear. Does it really matter who leaves a country? And if so, who is most affected?

 

This study answers these questions by estimating the impact of migrant self-selection on welfare in the sending and receiving countries. The authors compare GDP per capita under the observed migration pattern with a simulated scenario, in which the skills of the migrants resemble those of the home population, while the number of migrants remains constant.

 

Two episodes of mass migration to the United States serve as examples: the migration from Norway in the 1880s and the migration from Mexico in the 2000s. Norwegian emigrants were positively selected – they had higher skills than people who stayed in Norway – whereas Mexican emigrants were negatively selected.

 

In both periods, the authors find virtually no aggregate effect in the United States, while the effects are large in the sending countries: migrant selection decreases Norwegian GDP by 0.3%, and increases Mexican GDP by almost 1%. 1% may not seem like a large impact at first, but the authors show that it is as large as the difference in GDP per capita between zero migration and the current level of migration.

 

Yet, self-selection only matters if a number of conditions are met. The migration flow has to change significantly the population size, and the skills of migrants have to be sufficiently different from those of stayers. This was the case in Mexico, but not in Norway.

 

In the United States, the effect is zero due to the low transferability of migrant skills. Mexican immigrants are so heavily concentrated at the lower end of the US skill distribution that an improvement of their skills due to a more positive skill selection would not have any aggregate effect in the United States.

 

Overall, the results suggest that it matters who migrates, but only for the sending countries, and only under certain conditions. Unless the level of immigration is much larger than it is today, migrant selection has no impact on GDP per capita in the receiving countries.

 

ENDS

 

 

Notes for editors:

‘Let’s be selective about migrant self-selection’ by Costanza Biavaschi and Benjamin Elsner

 

For further information, contact:

Benjamin Elsner, elsner@iza.org, +49 178 196 0717

Romesh Vaitilingam: romesh@vaitilingam.com, +44 7768 661095