THE MACRO (ECONOMIC) DETERMINANTS OF
INTERNATIONAL MIGRATION: A SURVEY
by
Michael J. Greenwood
University of Colorado at Boulder
What do we mean by the 'determinants' of migration?
ANSWER:
The determinants of migration are those factors that
influence migration decisions, including the
magnitudes of the various influences.
In the context of international migration, the term usually refers to those
factors that influence decisions to cross international boundaries and
presumably to settle more or less permanently in the receiving country.
Duration of the Move
permanent
International
Migration
temporary
seasonal
Many potential perspectives from which to study the
determinants of international migration:
1.
Disciplinary Perspective:
a. Historical
b. Political
c. Social
d. Economics (this is ours)
e. Others (e.g., geography)
2.
Time period
Long Run

studies long sweeps of history (e.g., 1820-1920
movements from Europe to North America)
(often from a source to a destination)

typically uses (lengthy) time-series data
VERSUS
Short Run

studies the determinants as of a given year

typically uses a cross-sectional data

frequently fairly contemporary
VERSUS
Intermediate Run
pools cross-sectional and time-series data, where the time
series is fairly short (5, 10, perhaps 20 years).
3.
Country of Immigration (Demand for labor)
VERSUS
Country of Emigration (Supply of labor)
These perspectives are almost never mixed due to data
limitations. The formation of a matrix of international migration
flows, which is commonly done in studies of internal migration, is
almost never done in studies of international migration because
almost every country has a unique method of:
(a)
(b)
defining an international migrant
measuring migration across borders
Therefore, the typical approach is to use data from a
given country and study:
(a)
the determinants of immigration to that country
or
(b)
NOTE:
the determinants of emigration from that
country.
This perspective could extend to broad areas, such
as immigration to North America or Europe,
emigration from Asia, etc.
4.
Micro Perspective
individuals or families
VERSUS
Macro Perspective
Our macro perspective:
(a)
(b)
(c)
NOTE:
aggregate flows or aggregate characteristics
of a nation
Studies using
Aggregate flows of immigrants or emigrants (as a dependent
variable in a regression analysis). Could involve aggregate
flows of specific types of migrants (e.g., males, person over 50
years of age.)
Aggregate characteristics of origin and/or destination countries
(e.g., per capita GDP, Average Manufacturing Wages).
Aggregate characteristics of regions in the receiving country.
(This practice is common in the study of immigrant settlement
patterns.)
Such characteristics are not uncommonly used when microdata
are used as a dependent variable. (Such aggregate
characteristics often distinguish person from place attributes.)
5.
Bilateral
(One-way) flows between a given pair
of countries (Sometimes these
studies include among the
independent variables some
indicator of the attractiveness of
an alternative destination.)
VERSUS
Multilateral
(One-way) flows between many
countries (e.g., flows from many origins to a
given destination; flows from a given origin
to many destinations)
(Occasionally, but not frequently, these
studies use some indicator of the
attractiveness of an alternative
destination.)
Other distinctions between immigrants are frequently important:
1.
Characteristics of the movers

Professional and technical (PTK) workers
(Sometimes studied from the point of view of the
'brain drain,' or the migration of high-level human
capital from the less-developed to more developed
countries.)
Males/Females
(Presumably because of the idea that men are more
likely to be 'economic migrants' due to their higher labor
force participation rates; perhaps also because men are
thought to be more likely to compete for jobs in the
destination.)
Age specific flows of immigrants
--
Young labor force members
(Who are likely to compete for jobs)
--
Older persons
(Who may enjoy social benefits without having
paid taxes to the country during their working
years.)
2.
Admittance policy in destination country:

New entrants/Adjustments of status
(Those who adjust are said to be (legally) indirect
immigrants.)



Principals/Beneficiaries
Exempt from quota limits/Subject to quota limits
Those who enter under 'occupational' preferences/Those
who enter under 'family preferences'
Legal/Illegal
3.
Those who become citizens of the destination
country/Those who do not
4.
Geographically direct/Geographically indirect
(Infrequently studied due to lack of data or trouble in
getting to the data.)
5.
Voluntary/Involuntary
Two main 'vectors' of variables to explain (voluntary)
international migration:
1.
Differential economic opportunity
2.
Costs of transferring occupational skills
Broadly speaking, these are the key forces underlying the
economic approach to or economic model of international
migration →
An individual (family) maximizes utility subject to a budget
constraint (and in international migration subject to all sorts of
legal constraints). Thus, benefits and costs become critical to
the decision.
Legal constraints could prevent potential migrants from
1.
leaving (emigrating)
2.
entering
3.
moving when they wish, or
4.
with who they wish
Such constraints have not frequently been taken into account in
empirical models of international migration, but they are very
important. Failure to account for them can severely bias
estimated parameters.
Differential Economic Opportunity
Depending upon exactly who is migrating, differential economic
opportunity could be (and has been) proxied by:

Wage rates (typically manufacturing)

Annual earnings levels

Per capita GDP



All converted to a common currency and measured in
real terms (i.e., some sort of cost-of-living adjustment)
Tax rates
Availability and magnitude of public programs/transfer
payments

Unemployment rates

Employment growth rates

Some measure of real national growth that presumably
reflects labor demand
Differential Economic Opportunity
1.
Historical studies
Between 1815 and 1914, 60 million Europeans left
their homes to settle elsewhere. This was 20% of Europe's
1850 population.



Much on migration from Europe to the U.S., Canada, and
Australia
“Push” forces of European origin versus
“Pull” forces of North American origin
Relative wages versus relative employment opportunities
2.
Contemporary studies
i.
Cross-sectional studies
ii.
Time-series studies
iii.
Studies based on pooled cross-section and timeseries data
iv.
Special groups

Highly skilled or educated

Those who adjusted status

Less-skilled/unskilled workers

Older persons
3.
Immigrant settlement patterns (U.S.)
i.
Late nineteenth and early twentieth century
immigrants
ii.
Contemporary immigrants


Responsive to economic incentives
Have a strong tendency to locate near people from their
home country
Costs of Transferring Occupational Skills
Direct Costs
Out of pocket costs
(e.g., transportation costs)
Indirect Costs
Less than perfect transferability of skills
(e.g., schooling in a different language,
opportunity costs)
These costs can be overcome by human capital investments, but they
represent real costs
Costs of transferring Occupational Skills
A.
Direct Costs
i.
Distance
ii.
Information

Quality of Information
-----
----
distance
same language
(U.S.) military base
number of prior
migrants from a
given country
Voice-of-America
broadcast in native
language
literacy rate
official offices
B.
Indirect Costs
i.
Language Similarity
ii.
Attending School in the Destination Country
iii.
Source Country Level of Development
iv.
Level of Education
v.
Influence of Past Migration
vi.
Political Conditions in Source Country
vii.
Importance of Alternative Destinations
Historical Literature
Major Question: Were migration flows from Europe to North America
driven (caused) by economic conditions in Europe or
by economic conditions in the U.S. and Canada?
The debate focuses mainly on the period up to about 1920 when the U.S.
imposed entry restrictions. Thus, the period in question was characterized by
“laissez-faire” (no major institutional impediments) with regard to international
migration.
A related question: Were differential job opportunities more or less
important than differential wages in determining the
volume of the flows?
Jerome (1926) studied migration from Europe to the U.S. over
approximately a 100-year period prior to the 1920s. He
concludes that: economic conditions in the U.S. rather than
in Europe were primarily responsible for “short-cycle”
movements. Thus, “pull” as opposed to “push” forces were
dominant.
Kelley (1965) studied migration from Britain to Australia, 18651935, and also concludes that pull factors (low
unemployment rates) were primarily responsible for the
flows.
However, Thomas (1973) studies so-called “long swings” and
concludes that before 1870 conditions in Europe were probably
more important, but after 1870 conditions in the Americas were
more important.
Kuznets (1958) argues for pull factors, even in connection with
long swings:
“Since it is highly unlikely that the timing of either both
cycles or 'push' elements was the same in so many
different parts of the world, the similarity must be
ascribed to some 'pull' factors.”
D.S. Thomas (1941) studied Swedish migration to the U.S.
during the late 19th and early 20th centuries and concludes that
economic conditions in Sweden were more important than those
in the U.S. But more recently (1967), Wilkinson claims to show
the reverse.
Quigley (1972), however, comes down on the side of
D.S. Thomas regarding Swedish flows. Industrial wages in the
U.S. appeared to him to be the key factor.
Gallaway & Vedder (1971) argue that forces on both sides of
the Atlantic were of some importance, but the pull of
employment opportunities and high wages in the U.S. were most
important.
Greenwood
More recently, a number of studies have focused on fairly
contemporary flows to the U.S. and Canada. For the U.S. wage
rates are frequently found to be important, but the same does
not seem to be true for Canada in several similar studies.
Demand for entry/Supply of immigrants
Potential problems in contemporary studies:
1) Institutional impediments to the free international flow of
labor blunt the importance of economic incentives and
make it difficult to judge how important differential
economic opportunity really is.
2)
Those who actually move and are measured as such do
not reflect everyone who would like to move. We might
like to study applications for admission rather than or in
addition to actual admissions.
3)
A delay occurs between application for admission and
actual admission. Economic conditions might be different
at the time of admission than at the time an application
was made for admission.
4)
Data are frequently suspect for many reasons.
Greenwood and McDowell (1991) consider several types of variables in their
study of migration to the U.S. and Canada:
1)
Differential economic advantage
a.
Wi/Wj
where
Wi = wage in source
country
Wj = wage in
U.S./Canada
b.
2)
GRGDPi/GRGDPj
Costs of transferring occupational skills
a.
DISTij
b.
LANGi
c.
EDUi
d.
(DISTij) (TIME)
3)
4)
Level of development and political conditions
a.
URBPOPi
(% urban population)
b.
MAN%
(% manufacturing employment i)
c.
INDij
(index of industrial similarity)
d.
POLIT
(index of political rights i)
e.
CRISES
(international crisis or war)
U.S./Canadian immigration policy controls
Data: 18 major source countries
1962-1984
For the U.S.:
1)
Higher origin wage rates compared to those in U.S. discourage
migration to the U.S.
2)
Migration falls off sharply with distance.
3)
Migration from these countries has fallen over time.
4)
English language encourages skill transfer.
5)
Education encourages skill transfer.
6)
Political repression causes more movement to U.S.
7)
% urban population, % manufacturing employment cause more.
8)
U.S. immigration policy has been critical.
For Canada:
1)
Higher origin wage rates discourage migration.
2)
Migration falls with distance.
3)
Migration from these countries has risen over time.
4)
English/French language is important.
5)
Canadian immigration policy has been critical.