Cross-Border Migration, Employment and Economic Growth

Transcription

1 Cro-Border Migraion, Employmen and Economic Growh BACKGROUND RESEARCH PAPER Frédéric Docquier Submied o he High Level Panel on he Po-2015 Developmen Agenda Thi paper reflec he view of he auhor and doe no repreen he view of he Panel. I i provided a background reearch for he HLP Repor, one of many inpu o he proce. May 2013

2 Cro-Border Migraion, Employmen and Economic Growh 1 Frédéric Docquier FNRS and IRES, Univerié Caholique de Louvain May Inroducion In 2000, he Unied Naion member ae and inernaional organizaion agreed o arge eigh Millennium Developmen Goal for he year Increaing human capial (educaion and healh), combaing gender inequaliy and eradicaing exreme povery are among he high prioriie. Anoher objecive of he Millennium declaraion i o e-up a global parnerhip for developmen ha addree he pecial need of vulnerable group, including he lea developed counrie, landlocked developing counrie and developing mall iland ae. Thi require indurialized counrie o conduc more developmen-friendly rade, deb relief and developmen aiance policie. Alhough here are clearly force ha creae he poenial for exploive economic growh in poor counrie (e.g. China, India, Brazil, ec.) and region (Ea Aia), here are alo oppoing rong force for agnaion or "imploive" decline. In paricular, he lack of economic growh, rampan povery and he correlae of povery (weak iniuion, dicriminaion, poliical repreion, lack of freedom, ec.) moivae people o flee heir own counry; highly killed worker are found o be far more reponive o economic puh-pull facor when compared o he low killed (ee Grogger and Hanon, 2011, or Docquier e al., 2007). Poiive elecion in emigraion can be harmful for poor counrie, epecially for he lea developed counrie and mall iland developing ae experiencing a large brain drain. In he fir Millennium declaraion, he role of cro-border migraion and migraion policie i ignored. Thi paper provide an up-o-dae and comprehenive analyi of he effec of croborder migraion on he world diribuion of human capial and dicue he poenial implicaion for developmen and for he effecivene of developmen policie. 1 Thi paper wa funded by he Unied Naion High-Level Panel convened o conruc he po-2015 Millennium Developmen Goal agenda, co-chaired by Preiden Suilo Bambang Yudhoyono of Indoneia, Preiden Ellen Johnon Sirleaf of Liberia and Prime Minier David Cameron of he Unied Kingdom. I alo acknowledge financial uppor from he Belgian French-peaking Communiy (convenion ARC 09/ on "Geographical Mobiliy of Worker and Firm"). The uual diclaimer apply. 1

3 I how ha ranfer of human capial from he Souh o he Norh have been increaing over he la few decade. Alhough he proporion of inernaional migran in he world populaion ha been fairly able, immigraion rae in high-income counrie have ripled ince 1960, following he ame rajecory a he world rade/gdp raio. An increaing proporion of hee migran originae from developing counrie: Souh-Norh migraion i a key componen of globalizaion. Thi ha affeced he geographic diribuion of human capial acro he world. Wih very few excepion, emigran from boh developing and OECD ource counrie are more educaed han hoe lef behind. The ineniy of poiive elecion increae wih povery and inverely wih ize, he malle ae being mo affeced. Hence, brain drain rae range from a few percen o 85 percen of he high-killed naive labor force, and he mo affeced counrie are mall, poor, Englih-peaking counrie locaed under he ropic. Second, he effec of emigraion on developmen and welfare in he ource counrie i likely o be heerogeneou. Due o poiive elecion, many counrie exhibi large brain drain rae. An increaing lieraure ha hown ha he brain drain can be he ource of beneficial effec for ource counrie. Mo likely, a iuaion of beneficial brain drain can only be obained in a very limied number of relaively large, inermediae-income developing counrie. In indurialized counrie and in he va majoriy of developing counrie, he brain drain appear o be a cure. Thi i paricularly he cae of he lea developed counrie and developing mall iland ae. Addreing he problem require cloer inegraion beween developmen raegie and he managemen of migraion policie. More preciely, complex (bi-direcional) ineracion beween he brain drain and povery can be he ource of viciou/viruou circle and muliple equilibria. Developing mall iland ae are more expoed o he rik of coordinaion failure becaue migraion i more reponive o wage differenial. Forcing people o ay pu i clearly no he be opion ince ome origin counrie are characerized by high level of poliical inabiliy, violence, dicriminaion, corrupion, ec. However he analyi preened in hi paper idenifie abou weny mall ae where he brain drain and povery could be reduced uing pecific developmen policie uch a a emporary ubidizaion of he repariaion of heir high-killed expariae. In indurialized counrie, aiude oward immigraion and incenive o reform immigraion policie parly depend on he economic co and benefi of immigraion. Thee co and benefi are clearly relaed o he educaional rucure of he immigran. Thi rucure varie acro counrie and cohor of immigran. Sock daa from OECD counrie reveal ha immigran can be more or le educaed han naive populaion depending on he average income level of he deinaion counry and on i immigraion policy (kill-elecive or no). Daa on recen migraion flow how ha recen immigran are more educaed han naive born populaion in almo all OECD counrie, alhough comparabiliy of naional and foreign degree i a key iue. A far a he economic impac of immigraion i concerned, immigraion ha lile labor marke and fical effec in OECD deinaion counrie. On average and conrary o popular belief, recen immigraion ha increaed naive average labor income, reduced wage inequaliy and decreaed he fical preure. The gain are larger in counrie operaing elecive policie, implying ha more elecive policie could be ued o magnify he economic benefi from immigraion. Nonehele, a he curren level of 2

4 immigraion, gain are alo oberved in non-elecive counrie. Immigraion hould be een a a more explici componen of developmen policie and inernaional coordinaion i deirable o inernalize he beneficial pillover effec of Souh-Norh, low-killed migraion. Finally, I alo inveigaed he global benefi ha could be induced by a furher liberalizaion of cro-border migraion. The gain appear o be limied. Thi i becaue, according o urvey daa on deired migraion, he number of addiional migran would be relaively low. Thee new migran mainly come from developing counrie and wan o emigrae o he Unied Sae, Europe and Saudi Arabia. They are lighly more educaed han hoe lef behind, bu much le educaed han non-migran a deinaion. Hence, liberalizing migraion would reduce human capial in virually all he region of he world. If produciviy depend on he average percenage of high-killed worker in a counry, produciviy would fall in almo all region. Thi effec almo balance he huge income gain experienced by new migran hemelve. The eimae provided in hi paper reveal ha in ome peimiic albei realiic cenario, liberalizing labor mobiliy could increae world GDP by abou 3.5 percen. The inequaliy effec of liberalizaion are unclear. Income per worker would decreae in poor counrie due o poiive elecion of heir emigran. However, a curren remiance rae, remiance en o hoe lef behind could exceed he decreae in local revenue. The remainder of hi paper i organized a follow. Secion 2 ue recen migraion daabae o analyze he evoluion of cro-border migraion and i effec on he geographical diribuion of human capial. Secion 3 udie he economic implicaion of immigraion for OECD receiving counrie and dicue ome policy iue. Secion 4 review he lieraure on emigraion and inveigae he complex ineracion beween he brain drain and developmen. In Secion 5, I explore he poible conequence of a complee liberalizaion of cro-border migraion on he world economy. Secion 6 conclude. 2. Size and rucure of cro-border migraion Alhough many apec of migraion have been analyzed by demographer, economi, ociologi and oher ocial cieni, daa conrain have long impeded ome imporan reearch avenue. Recenly, everal daabae have been conruced o documen human migraion by counry of origin, counry of deinaion, gender and educaion level. Thee udie confirm ha cro-border migraion i a powerful force ha hape he diribuion of human populaion acro he globe hereby affecing heir ocial, poliical, and economic rucure. In hi ecion, I will refer o a number of recen migraion daae o analyze he ize, developmen, and paial diribuion of inernaional migraion. I fir decribe he global rend oberved during he la five decade (Secion 2.1). Then I ll focu on he nineie and characerize he educaion level of immigran and emigraion (Secion 2.2 and 2.3). Finally, I will inroduce he concep of balance of brain and udy how cro-border migraion affec he geographical mobiliy of human capial (Secion 2.4). 3

5 2.1. Global aemen The Unied Naion' Inernaional Migran Sock daabae provide ime erie daa on he number of immigran, by counry of deinaion, by age and by ex. I reveal ha he number of inernaional migran increaed from 75 million in 1960 o 214 million in 2010, a abou he ame pace a he world populaion, meaning ha he world migraion rae increaed only lighly, from 2.5 o 3.1 percen of he world populaion. The major par of hi change i acually arificial and due o he dilocaion of he former Sovie Union and Eaern European counrie. Worker born in he new Republic were reaed a Sovie, Yugolavian or Czecholovakian naive in he 1985 wave; hey have been reaed a inernaional migran ince A apparen from Figure 1.a, he proporion of inernaional migran roe from 2.3 o 2.9 percen beween 1985 and Correcing for he fall of he Berlin wall, he acual proporion of cro-border migran ha remained fairly able ince Over he ame period, he world rade/gdp raio increaed hreefold, riing from 0.1 o 0.2 beween 1960 and 1990 and from 0.2 o 0.3 beween 1990 and 2000 (grey curve on Figure 1.a). The raio of foreign direc invemen (FDI) o world oupu, on he oher hand, increaed hreefold during he 1990 alone. One migh conclude ha globalizaion i mainly abou rade and FDI, no migraion. The picure change once he focu i narrowed o migraion o developed counrie. The proporion of cro-border migran reiding in high-income counrie increaed from 43 o 60 percen beween 1960 and A hown on figure 1.b, he average immigraion rae o high-income counrie, a meaured by he hare of he foreign-born in he oal populaion of hee counrie, ha ripled ince 1960 and doubled ince 1985, following he ame rajecory a he rade/gdp raio (alhough he cale of migraion differ from ha of rade). Where do hee migran come from? The Unied Naion Inernaional Migran Sock daabae lack a bilaeral dimenion. Thi problem i addreed in Ozden e al. (2011), (referred o a OPSW henceforh). OPSW colleced and harmonized over 1,000 cenue and populaion regier o conruc comprehenive marice of origin-deinaion ock ha correpond o he la five compleed cenu round. They pecified a andard and common e of counrie for he enire period, diaggregaing daa for he counrie ha no longer exi on he bai of more recen migraion figure. There i no arificial variaion due o he dilocaion of he Eaern Block. Finally, he OPSW daabae focue on economic migran and doe no include refugee, a oppoed o he Inernaional Migran Sock daabae of he Unied Naion. The OPSW daa reveal ha he global migran ock increaed from 92 o 165 million beween 1960 and A a proporion of he world populaion, he migran ock declined beween 1960 and 1990, from 3.05% o 2.63%; afer which i again roe o 2.71% in The OPSW daabae provide a comprehenive picure of bilaeral global migraion over he la half of he wenieh cenury. Figure 1.c and 1.d dienangle he ock of migran by counry of deinaion and counry of birh. I diinguih here he 30 High-income OECD member ae (referred o a he Norh, and labeled HIOECD) and he oher counrie (referred o a he Souh, and labeled non-hioecd). The HIOECD group include member 4

6 of he OECD excep for four Upper-Middle-Income counrie: Chile, Lavia, Mexico, and Turkey. A hown on Figure 1.c, Souh-Souh migraion dominae he global migran ock: he number of Souh-Souh migran amouned o 72.6 million in 2000, coniuing abou 44.6 percen of all inernaional migran. Then come Souh-Norh (55.4 million) and Norh-Norh migraion (28.3 million), repreening 34.0 and 17.4 percen of all migran. Norh-Souh corridor are he lea ued. The rend reveal ha he growh in he number of migran i largely driven by he emigraion from he Souh o he Norh, which increaed from 10.8 million o 55.4 million beween 1960 and 2000; he number of Norh-Norh migran ha remained fairly able. Table 1 idenifie he main migraion corridor in 2000 and corridor wih he greae increae in he number of migran over he period The Unied Sae appear a he deinaion for many imporan Norh-Norh and Souh-Norh corridor. The iuaion i more diverified for Souh-Souh corridor. Due o heir ize, India and Ruia are imporan deinaion. The daa reveal he emergence of Saudi Arabia and oher oil producing counrie a major deinaion counrie Srucure of immigraion o OECD deinaion counie Migraion of he highly killed (or educaed) i a paricular ource of concern for ome counrie a i ha ignifican growh and developmen implicaion for origin and deinaion counrie. I have already hown ha immigraion rae in high-income OECD counrie are larger han in he re of he world, ha hey have increaed ignificanly faer in he la 50 year, and ha an increaing hare of hee migran are originaing from he Souh. A cliché a i may eem, he media of mo indurialized counrie commonly porray a maive flow of poorly educaed individual from poor counrie o rich. I i he cae? The OPSW longiudinal daabae canno be ued o addre hi queion. While i ignificanly broaden he ime, gender and geographical coverage of he available daa, differen kill or educaion level are no diinguihed. Anoher e of udie ha inveigaed he educaion rucure of cro-border migraion. Docquier and Marfouk (2006) and Dumon and Lemaire (2004) colleced deailed cenu and regier daa on immigraion from all he ho counrie of he OECD. Docquier, Ozden, Paron and Aruc (2012) (referred o a DOPA henceforh) generalized hee work and buil comprehenive marice of bilaeral immigran and emigran ock for 195 counrie in 1990 and 2000 for wo kill/educaion level, denoed by. They ued he OECD immigraion daa from Docquier and Marfouk (2006) and upplemened hem wih imilar cenu daa from 46 and 31 addiional deinaion counrie in 2000 and 1990, repecively. For he re of he deinaion counrie where cenu daa i no available, hey prediced bilaeral migran ock uing a graviy framework. Their mehodology i decribed in greaer deail in Docquier e al. (2012). 5

7 Figure 1. Global migraion paern, ,3 1.a. World migraion and rade b. Immigraion o high-income counrie and rade ,30 0,10 0,25 3,5 3 0,25 0,09 0,08 0,2 0,15 2,5 2 1,5 0,20 0,15 0,07 0,06 0,05 0,04 0,1 1 0,10 0,03 0,5 0,02 0, , ,01 World real rade / World GDP (a) Migran / Populaion (World) (b) 1.c. Geographic rucure of inernaional migraion (million) World real rade / World GDP (a) Sock of immigran / Populaion in high-income counrie (b) 1.d. Geographic rucure of inernaional migraion (percen) Source: (a) Barriel, M. and M.R.W. Dean (2004), "Why ha World Trade Grown Faer han World Oupu?. Bank of England Quarerly Bullein (hp://rn.com/abrac=700072); (b) Unied Naion, Populaion Diviion, available a hp://ea.un.org/migraion/; (c) Ozden, Paron, Schiff and Walmley (2011) 6

8 Table 1. Main migraion corridor Sock of migran in 2000 Change in migraion ock, No. of No. of Origin Deinaion Origin Deinaion migran migran From OECD o OECD From OECD o OECD Poland Germany 1,999,975 Korea Unied Sae 884,080 Germany Unied Sae 1,250,815 Ireland UK 622,658 Unied Kingdom Auralia 1,026,553 Ialy Germany 412,729 Canada Unied Sae 950,549 Japan Unied Sae 385,546 Korea Unied Sae 896,982 Poland France 325,959 Unied Kingdom Unied Sae 833,858 Greece Germany 321,351 Poland France 800,387 New Zealand Auralia 304,643 Korea Japan 685,943 UK Auralia 302,157 Ialy Germany 629,291 Slovakia Czech Republic 266,119 Ireland UK 623,521 Germany Unied Sae 215,546 From non-oecd o OECD From non-oecd o OECD Mexico Unied Sae 9,367,910 Mexico Unied Sae 8,757,123 Turkey Germany 2,008,979 Turkey Germany 1,981,993 Philippine Unied Sae 1,505,820 Philippine Unied Sae 1,394,019 Algeria France 1,057,135 India Unied Sae 1,027,410 India Unied Sae 1,041,320 Vienam Unied Sae 1,014,035 Vienam Unied Sae 1,028,454 China Unied Sae 911,028 China Unied Sae 1,016,412 El Salvador Unied Sae 820,130 Ruia Germany 978,793 Cuba Unied Sae 809,399 Cuba Unied Sae 894,560 Dominican Republic Unied Sae 693,629 El Salvador Unied Sae 827,583 Ruia Germany 692,584 From non-oecd o non-oecd From non-oecd o non-oecd Ruia Ukraine 3,833,773 Bangladeh India 3,776,876 Bangladeh India 3,789,377 Kazakhan Ruia 1,441,729 Ukraine Ruia 3,497,193 India Saudi Arabia 995,200 Kazakhan Ruia 2,539,368 Egyp Saudi Arabia 968,095 India Pakian 2,512,906 Uzbekian Ruia 901,847 China Hong Kong 2,164,744 Indoneia Malayia 879,930 Ruia Kazakhan 1,944,419 Burkina Fao Coe d'ivoire 849,561 Pakian India 1,331,659 India UAE 750,421 Burkina Fao Coe d'ivoire 1,252,098 Azerbaijan Ruia 730,093 India Saudi Arabia 1,007,649 Afghanian Iran 719,907 Source: Ozden, Paron, Schiff and Walmley (2011). 7

9 The DOPA daae only record individual (migran and non-migran) aged 25 and over a a proxy of he working-age populaion. Thi choice maximize he comparabiliy beween migraion and labor force daa for a given level of educaion (he well-known Barro and Lee daabae on educaional aainmen documen he educaion level of reiden worker aged 15+ or 25+ in many counrie). Furhermore, i exclude a large number of uden who emigrae emporarily o complee heir educaion or children who migrae wih heir familie and are no ye acive in he labor marke (hi explain why he 25+ caegory i preferred o he 15+). High-killed individual are hoe wih college educaion (=h) and he oher are he le educaed (=l). The daabae i compoed of four marice (one for each kill level and for each year). Denoing by M ij, he number of migran wih educaion level (=h,l) from counry i o counry j a year, he reiden and naive populaion are repecively defined a: L i, M ji, j, M. N i, ij, j The ock of immigran o counry i i defined a I i, M ji, j i. To characerize he rucure of immigraion, I compued he following indicaor: i i, I i, / Ni,, nii, ( I i,2000 I i,1990) / Ni, 1990 for all educaion ype or for high-killed worker only. Variable give he ock of immigran of ype a year a percenage of he naive populaion of he ame ype. Variable ni, i give he ne change in he ock of immigran of ype beween 1990 and 2000 (a meaure of ne immigraion flow ) a percenage of he naive populaion a he aring dae Immigraion reduce he proporion of college graduae in he economy if ( h l n ) ii, ( n) ii, h l h, or equivalenly, ( ) i ( n i. n i, ) i, Reul for all OECD counrie are preened in Table 2. I i worh noicing ha cenu daa i available for all OECD counrie. Impued/eimaed daa i only ued o capure emigraion o non-oecd deinaion counrie, a variable ued o proxy he ize of he naive labor force in he DOPA daabae. Focuing on ock daa for he year 2000, i appear ha he greae immigraion rae are oberved in Irael, Eonia, Swizerland, Luxembourg, Canada and New Zealand. On he conrary, immigraion i low in Chile, Hungary, Japan, Mexico, Korea or Slovakia. In half of he ample, high-killed immigraion rae exceed average immigraion rae: hi i he cae in counrie conducing elecive immigraion policie (Canada, Auralia, and New Zealand), Scandinavian counrie and le advanced counrie where immigraion rae are low (Eaern Europe, Souhern Europe, Mexico, and Turkey). On he conrary, in many Weern European i i, 8

10 counrie, immigraion i biaed oward he le educaed and reduce he proporion of educaed worker. Thi i paricularly he cae in Auria, Belgium, France, Germany where he ock of immigran include many low-killed migran who arrived before he oil crii of he evenie (a a conequence of gue-worker program) and heir family member. Similar paern were oberved in Focuing on recen migraion flow (ne flow oberved over he nineie), he picure i differen. In all OECD counrie wih poiive ne immigraion rae (wih he excepion of Auria), immigraion rae for college graduae were larger han he average rae. In ome prominen deinaion uch a Irael, Ireland, Iceland, Canada, Auralia and he Unied Kingdom, he immigraion rae for college educaed worker were more han wice a large a he overall immigraion rae. Therefore, recen immigraion conribued o increae he hare of college educaed individual in he labor force of all counrie in our ample (again wih he excepion of Auria). Eonia had negaive immigraion rae, implying large reurn of exiing immigran and even larger reurn rae for college educaed immigran. The daa ued o far cover migraion paern in he Only wih he collecion and dieminaion of daa from he 2010 cenue, will an analyi of he la decade of migraion for differen educaion group be poible. However, European Daa from he EU Labor Force urvey and US daa from he American Communiy Survey reveal he ame paern for he period , a period of large immigraion flow from Norhern Africa and he Middle Ea o Europe, and from Lain America o he US (ee Docquier, Ozden and Peri, 2013). The migraion daa i le han perfec. For example, undocumened migran are no fully meaured among immigran, and chooling i an imperfec meaure of heir human capial level. I will ackle ome of hee iue in he nex ecion. However he view of a maive flow of uneducaed individual from poor counrie o OECD i no confirmed by he primary daa. The hare of college graduae among recen immigran exceed he hare among naive in virually all OECD counrie. Thee paern have clear implicaion for he poenial labor marke and he fical effec of immigraion, epecially on le-educaed naive worker (ee Secion 3.1). 9

11 Table 2. Immigraion rae o high-income OECD deinaion counrie Counry Ne flow (a) Sock in 2000 (b) Sock in 1990 (b) Toal College Toal College Toal College Auralia 0,053 0,202 0,379 0,565 0,409 0,512 Auria 0,092 0,071 0,148 0,076 0,060 0,025 Belgium 0,028 0,057 0,136 0,093 0,116 0,061 Canada 0,062 0,133 0,273 0,322 0,246 0,294 Czech Republic 0,004 0,049 0,059 0,059 0,060 0,027 Denmark 0,025 0,028 0,062 0,047 0,039 0,027 Eonia -0,252-0,670 0,299 0,486 0,598 1,867 Finland 0,016 0,022 0,023 0,021 0,008 0,006 France 0,009 0,034 0,098 0,064 0,099 0,042 Germany 0,027 0,038 0,081 0,066 0,058 0,044 Greece 0,002 0,003 0,053 0,050 0,058 0,077 Hungary -0,001 0,001 0,007 0,007 0,008 0,006 Iceland 0,052 0,145 0,124 0,214 0,088 0,135 Ireland 0,057 0,191 0,100 0,193 0,048 0,076 Irael 0,232 0,711 0,677 0,955 0,824 0,323 Ialy 0,010 0,010 0,021 0,018 0,013 0,014 Japan 0,005 0,008 0,010 0,012 0,007 0,007 Korea 0,000 0,001 0,004 0,005 0,005 0,009 Luxembourg 0,150 0,185 0,435 0,314 0,305 0,225 Neherland 0,027 0,068 0,180 0,170 0,175 0,145 New Zealand 0,060 0,091 0,225 0,361 0,210 0,449 Norway 0,031 0,059 0,075 0,099 0,049 0,070 Poland -0,011-0,008 0,028 0,031 0,042 0,051 Porugal 0,013 0,026 0,018 0,027 0,007 0,015 Slovakia 0,003 0,011 0,004 0,010 0,002 0,003 Slovenia -0,001 0,013 0,114 0,086 0,133 0,125 Spain 0,033 0,059 0,055 0,067 0,029 0,042 Sweden 0,029 0,069 0,133 0,120 0,110 0,082 Swizerland 0,020 0,105 0,292 0,289 0,299 0,207 Unied Kingdom 0,021 0,101 0,088 0,148 0,071 0,083 Unied Sae 0,063 0,072 0,151 0,123 0,101 0,107 Noe. (a) Ne flow i defined a he difference beween he immigraion ock in 2000 and he immigraion ock in 1990, expreed a proporion of he naive populaion in (b) Sock of immigran a year, expreed a proporion of he naive populaion a year. Source: Docquier, Ozden, Paron and Aruc (2012). 10

12 2.3. Srucure of emigraion A major novely of he DOPA comprehenive marice i ha hey can be ued o characerize he ize and rucure of low-killed and high-killed emigraion ock for all counrie of origin. The ock of emigran from counry i i defined a E i, M ij, j i. To characerize he rucure of emigraion, I compued he following indicaor: e i, Ei, / Ni,, nei, ( Ei,2000 Ei,1990) / Ni, 1990 for all educaion ype or for high-killed worker only. Variable give he ock of emigran of ype a year a a percenage of he naive populaion in he ame educaion caegory. Variable ne, i expree he ne change in he ock of emigran of ype beween 1990 and 2000 (a meaure of ne emigraion flow ) a a percenage of he naive populaion a he aring dae Emigraion reduce he proporion of college graduae in he h l h l h economy if ( ) e ( n e, or equivalenly, ( ) e ( n e. n i, ) i, n i, ) i, The empirical lieraure ha revealed inereing emigraion paern (e.g. Docquier e al., 2007, Grogger and Hanon, 2011). Fir, he analyi of aggregae emigraion rae reveal ha high-killed emigraion rae exceed low-killed and average emigraion rae in virually all counrie. Thi reul alo hold rue for boh developing counrie and OECD member ae. Second, average emigraion rae are clearly endogenou: hey decreae wih he ize of he origin counry (larger, le open), decreae wih diance from he neare OECD counry, increae if Englih i an official language. There i alo, o a leer exen, a mixed effec by developmen level (GDP per capia): he greae emigraion rae are oberved in middleincome counrie where incenive o leave are imporan and liquidiy conrain are no oo binding. Third, he level of developmen i he major deerminan of poiive elecion, meaured a he gap beween high-killed and low-killed emigraion rae: poorer counrie exhibi greaer poiive elecion. Combining hee finding, counrie wih he large brain drain rae are mall, poor, Englih-peaking counrie locaed under he ropic. In Table 3, I decribe he reul obained for he 40 counrie wih he greae high-killed emigraion rae in I exclude counrie wih le han one million inhabian aged 25 and over. A explained above, poiive elecion i a very robu paern of inernaional migraion: high-killed emigraion rae exceed by far he average emigraion rae. We idenify 6 counrie loing more han half of heir college educaed populaion and wo counrie (Haii and Jamaica) loing more han 80 percen of heir naive brain. Many oher mall ae wih le han one million worker are in he ame iuaion. High-killed worker are more and more mobile: ne emigraion rae oberved during he nineie are imporan and exhibi ronger elecion han in e i, 11

13 Table 3. Emigraion rae by educaion level (40 counrie wih he greae brain drain) Counry Ne flow (a) Sock in 2000 (b) Sock in 1990 (b) Toal College Toal College Toal College Jamaica 0,145 0,659 0,350 0,850 0,306 0,856 Haii 0,069 1,022 0,123 0,809 0,081 0,725 Lebanon 0,077 0,293 0,249 0,566 0,267 0,673 Liberia -0,078 0,333 0,164 0,558 0,282 0,610 Lao 0,075 0,540 0,123 0,504 0,090 0,470 Sierra Leone 0,021 0,264 0,053 0,504 0,037 0,486 Erirea 0,022 0,149 0,134 0,457 0,135 0,483 Somalia 0,017 0,309 0,079 0,448 0,070 0,344 Afghanian -0,017 0,226 0,057 0,447 0,102 0,319 Yemen 0,001 0,307 0,064 0,438 0,100 0,937 Kenya 0,004 0,287 0,025 0,431 0,030 0,498 Uganda 0,019 0,266 0,036 0,419 0,028 0,438 Ireland -0,030 0,159 0,252 0,400 0,295 0,395 Cambodia 0,025 0,308 0,047 0,364 0,039 0,308 Bonia/Herz. 0,083 0,086 0,272 0,362 0,212 0,335 Congo, Rep 0,178 0,557 0,127 0,347 0,047 0,202 Sri Lanka 0,015 0,250 0,043 0,345 0,040 0,384 Nicaragua -0,006 0,213 0,155 0,338 0,207 0,325 Jordan 0,087 0,270 0,251 0,337 0,366 0,530 Togo 0,167 0,250 0,370 0,328 0,364 0,357 El Salvador 0,138 0,397 0,207 0,327 0,168 0,353 Hong Kong 0,068 0,178 0,150 0,319 0,134 0,301 Macedonia 0,063 0,197 0,188 0,314 0,161 0,306 Croaia 0,029 0,041 0,177 0,313 0,155 0,435 New Zealand 0,059 0,201 0,162 0,305 0,136 0,254 Rwanda -0,057 0,589 0,063 0,302 0,120 0,260 Cuba 0,025 0,118 0,110 0,293 0,110 0,318 Vienam 0,031 0,337 0,039 0,285 0,023 0,249 Armenia 0,066 0,050 0,128 0,265 0,058 0,222 Hondura 0,070 0,280 0,094 0,263 0,074 0,279 Serbia/Mon. 0,029 0,162 0,108 0,253 0,089 0,192 Zambia 0,017 0,291 0,034 0,253 0,026 0,318 Guaemala 0,064 0,233 0,090 0,247 0,058 0,214 Pakian 0,005 0,158 0,033 0,239 0,039 0,225 Morocco 0,038 0,218 0,101 0,235 0,099 0,299 Dominican Rep 0,105 0,236 0,143 0,233 0,093 0,265 Mali 0,086 0,232 0,280 0,231 0,273 0,216 Senegal 0,072 0,229 0,135 0,230 0,110 0,203 Albania 0,037 0,108 0,204 0,229 0,177 0,185 Benin 0,085 0,173 0,216 0,227 0,212 0,284 Noe. The able include counrie wih labor force above one million; counrie are ranked by emigraion rae of college graduae in 2000; (a) Ne flow i defined a he difference beween he emigraion ock in 2000 and he emigraion ock in 1990, expreed a proporion of he naive populaion in (b) Sock of emigran a year expreed a proporion of he naive populaion a year. Source: Docquier, Ozden, Paron and Aruc (2012). 12

14 2.4. Balance of brain The DOPA daabae alo permi comparing enrie and exi of worker and compuing migraion balance for college graduae and he le educaed for all naion ae. The balance of brain deermine he effec of cro-border migraion on he world diribuion of human capial. I defined a migraion balance a he difference beween emigraion and immigraion rae; a poiive balance reflec a migraion-induced defici of worker (a negaive balance reflec a urplu, repecively). Hence, he migraion balance meaure he ne lo of worker a a percenage of he naive labor force and eablihe he link beween he reiden and he naive labor force: b i, e i, i i, L i, N i, ( 1 bi, ). A human capial i uually perceived a a key engine of growh and developmen, wha maer for a counry i he join effec of high-killed and low-killed migraion on he kill raio (i.e. raio of college graduae o le educaed worker in he reiden labor force). Thi effec can be wrien a follow: L L h i, l i, N N h i, l i, (1 (1 b b h i, l i, ) ). In paricular, he raio of aying rae (one minu he ne migraion defici) give he oal direc effec of cro-border migraion on human capial accumulaion. I i worh noing ha migraion balance and he raio of aying rae can alo be compued uing migraion ne flow raher han migraion ock ( nb i, nei, nii, ). When compuing migraion balance (i.e. comparing enrie and exi), I implicily aumed a perfec equivalence beween he qualiy of naional and foreign educaion/degree. I i widely documened ha many immigran wih higher educaion end o find job in occupaion ypically affed by le educaed naive (ee Maoo e al, 2008). In paricular, highly educaed immigran rained in developing counrie may be le producive in high-kill job han naive wih imilar educaional degree. Evidence of uch heerogeneiy in he qualiy of educaion wa provided by Coulombe and Tremblay (2009): hey compared he kill ineniy and chooling level of Canadian immigran and naive who were boh ubmied o andardized e in lieracy, mah, and problem-olving. Thee e provide meaure of proficiency ha are comparable acro counrie and over ime. On hi bai, Coulombe and Tremblay eimaed a kill-chooling gap expreed in year of chooling. A kill-chooling gap of n year for a given counry mean ha Canadian naional wih ay 10 year of chooling are a producive a immigran wih 10+ n year of chooling. The larger he killchooling gap, he lower he qualiy of educaion in he counry of origin. Simple bivariae OLS regreion how ha he kill-chooling gap i a decreaing funcion of income per worker in he origin counry. Their poin eimae of he lope coefficien indicae ha he kill-chooling gap i one year le per worker when income increae by US$ in 13

15 he origin counry. Uing hi eimae and cro-counry daa on income per worker, I conruced an indicaor of kill-chooling gap for each origin counry. Then, auming ha one year of chooling generae a produciviy gain of 8 percen, I eimaed he relaive produciviy of educaed immigran and naive in each counry, wih a benchmark value of one for worker rained in Canada (a well a worker rained in richer origin counrie, i.e. he upper limi of hi index i one). For example, college graduae immigran from Angola and Porugal have produciviy level equal o 0.73 and 0.85 percen of Canadian college graduae, repecively. Table 3 repor he ne defici of college graduae worker ( of cro-border migraion on he kill raio, h l ( 1 b i, ) /(1 bi, ) and he oal direc effec ), uing ock daa for 2000 and ne flow oberved during he 1990, conrolling or no for he qualiy of educaion (A or U anding for adjued and unadjued, repecively). The op of he able give he weny main loer of human capial; he boom of he able give he weny main winner. I excluded counrie wih le han one million inhabian aged 25 and over. Unurpriingly, he main loer are counrie wih he greae brain drain rae lied in Table 2. In hee counrie, enrie are very mall and heir ne defici of brain i almo idenical o he gro brain drain rae. Conrolling for he qualiy of educaion ha a very mall impac on he defici; he correlaion rae beween adjued and unadjued balance of brain i around In Jamaica and Haii, cro-border migraion reduce he kill raio by abou 80 percen. Many maller ae are in he ame iuaion. In he oher counrie, i reduce he kill raio by 25 o 50 percen. In mo cae, he recen brain drain oberved in he nineie i lower han he long-run rend; excepion are Lao, he Democraic Republic of Congo, Yemen, El Salvador and Haii, where he recen evoluion i worriome (recen brain drain i around 90 percen). The main winner are rich counrie where enrie of high-killed worker exceed exi (heir defici of brain i negaive). Hence, high-killed migraion increae he number of college graduae by 2.5 percen in Spain, by 96.5 percen in Saudi Arabia, and by 326 percen in he Unied Arab Emirae; and cro-border migraion i reponible for an increae in he kill raio by 0.4 percen in Spain, 36 percen in Saudi Arabia and 123 percen in he Unied Arab Emirae. Cro-border migraion alo increae human capial in counrie conducing elecive immigraion policie uch a Auralia, New Zealand, Canada, he Unied Sae and Scandinavian counrie. 2 If he world ock of human capial wa fixed, cro-border migraion would clearly make i geographic diribuion more unequal. However, in Secion 4, I will eablih a link beween killed-biaed migraion propec and educaion deciion which may invalidae or aenuae hi effec. h b i, 2 Oher remarkable excepion are counrie of ma, low-killed emigraion uch a Mali, Guinea, Turkey, and Turkmenian. Alhough heir brain drain can be imporan, hee counrie experience maive low-killed emigraion flow or ho more college graduae from neighboring counrie: hi conribue o improving he kill raio. 14

16 Table 3. Balance of brain (weny main loer and winner) Ne defici of brain Ne effec on he kill raio Counry 2000-U 1990-U 2000-A 1990-A Counry 2000-U 1990-U 2000-A 1990-A Jamaica 0,847 0,652 0,845 0,649 Jamaica 0,203 0,375 0,274 0,410 Haii 0,807 0,901 0,807 0,900 Haii 0,210 0,099 0,229 0,100 Liberia 0,558 0,355 0,558 0,355 Coe d'ivoire 0,482 0,859 0,382 0,820 Sierra Leone 0,504 0,264 0,504 0,264 Liberia 0,483 0,592 0,509 0,572 Erirea 0,457 0,149 0,457 0,149 Sierra Leone 0,493 0,751 0,494 0,759 Somalia 0,448 0,309 0,448 0,309 Somalia 0,592 0,699 0,620 0,706 Lao 0,440 0,537 0,434 0,538 Afghanian 0,602 0,734 0,630 0,726 Afghanian 0,424 0,249 0,421 0,251 Hong Kong 0,611 0,996 0,562 0,936 Lebanon 0,415 0,178 0,425 0,185 Lao 0,614 0,490 0,667 0,512 Kenya 0,367 0,190 0,378 0,207 Erirea 0,616 0,870 0,674 0,883 Uganda 0,352 0,167 0,352 0,168 Kenya 0,632 0,795 0,623 0,774 Bonia/Herz 0,347 0,101 0,340 0,108 Lebanon 0,641 0,845 0,670 0,852 Congo, Rep 0,344 0,633 0,344 0,636 Uganda 0,651 0,861 0,653 0,870 Yemen 0,330 0,608 0,306 0,691 Yemen 0,690 0,392 0,739 0,312 El Salvador 0,323 0,411 0,323 0,416 Sri Lanka 0,702 0,756 0,712 0,760 Nicaragua 0,317 0,217 0,313 0,218 Ghana 0,722 0,729 0,663 0,699 Sri Lanka 0,315 0,254 0,312 0,254 Congo 0,731 0,576 0,786 0,834 Togo 0,307 0,297 0,306 0,303 Vienam 0,739 0,683 0,755 0,695 Cuba 0,293 0,118 0,293 0,118 Cuba 0,768 0,893 0,830 0,908 Macedonia 0,290 0,200 0,285 0,199 Nicaragua 0,768 0,766 0,872 0,765 Spain -0,025-0,029-0,022-0,027 Singapore 0,995 1,291 0,944 1,213 Belgium -0,028-0,028-0,012-0,018 Thailand 0,997 1,003 1,007 1,014 Norway -0,029-0,046-0,021-0,039 Ialy 1,002 0,980 1,009 0,976 Kyrgyzan -0,035-0,099-0,039-0,103 Turkmenian 1,003 1,030 0,997 1,013 Paraguay -0,046-0,067-0,081-0,106 Spain 1,004 0,996 0,995 0,984 Neherland -0,051-0,038-0,024-0,029 Turkey 1,026 1,033 1,044 1,042 New Zealand -0,057 0,110-0,056 0,123 Belaru 1,033 0,932 1,236 0,919 Coe d'ivoire -0,064 0,042-0,076 0,039 Porugal 1,039 0,921 1,087 0,921 Lavia -0,065 0,418-0,013 0,371 Mali 1,060 0,870 1,265 0,908 Sweden -0,067-0,045-0,047-0,030 Canada 1,062 1,089 0,958 1,031 Nepal -0,084 0,037-0,206 0,074 Nepal 1,065 0,962 1,169 0,924 Unied Sae -0,116-0,069-0,082-0,046 Paraguay 1,074 1,119 1,135 1,204 Singapore -0,161-0,272-0,117-0,214 Mauriania 1,082 0,940 1,322 1,132 Swizerland -0,176-0,064-0,133-0,048 Guinea 1,150 1,062 1,265 1,102 Canada -0,258-0,113-0,202-0,081 Auralia 1,184 1,193 1,076 1,153 Auralia -0,517-0,177-0,443-0,153 Irael 1,266 1,879 1,016 1,540 Libya -0,622-0,445-0,622-0,443 Saudi Arabia 1,358 1,584 1,159 1,526 Irael -0,771-0,654-0,586-0,520 Libya 1,412 1,479 1,303 1,481 Saudi Arabia -0,965-0,609-0,940-0,593 Burkina Fao 1,589 1,021 2,403 1,042 UAE -3,258-1,236-3,234-1,226 UAE 2,233 1,624 1,861 1,445 Noe. Ne defici of brain i defined a he difference beween high-killed emigraion and immigraion, a percenage of he naive high-killed labor force. Ne change in he kill raio i he afer-o-before raio he kill raio. Daa i provided for he year 2000 or for he nineie (1990 ), unadjued (U) or adjued for he qualiy of educaion (A). Source: Docquier, Ozden, Paron and Aruc (2012), Coulombe and Tremblay (2009). 15

17 3. Implicaion of immigraion for deinaion counrie Immigraion impac economic performance and he welfare of naive in deinaion counrie hrough muliple channel (ee Borja, 2009). I modifie he number and characeriic of worker in he labor marke; i impac phyical capial accumulaion hrough change in aving and/or foreign invemen; i affec fical policie hrough change in axe, impac governmen conumpion and ranfer; i change he demand for domeic produc ince migran and naive have heerogeneou preference for domeic and impored good. The combinaion of hee channel deermine how migraion impac naive average income in ource and ho counrie. According o opinion urvey on aiude oward immigraion, he majoriy of ho-counry ciizen believe ha he impac of immigraion on welfare i negaive, he labor marke and fical effec being perceived a he mo imporan economic channel. Immigran are een a aking job away from local, or inducing downward preure on heir wage; and immigraion i mainly perceived a a maive flow of uneducaed individual from poor counrie who are rying o gain acce o he welfare yem. Thi view i no uppored by academic udie. In hi ecion, I review he lieraure on he labor marke effec of immigraion o OECD deinaion (Secion 3.1) and i fical impac (Secion 3.2). I hen dicu relaed policy implicaion (Secion 3.3) Wage and employmen effec of immigraion o OECD counrie To predic he wage and employmen effec of immigraion, I ue conenu microfoundaion decribed in deail in Docquier, Ozden and Peri (2013). The rucure of my labor marke model i common o virually all recen udie in he lieraure. Labor demand for each ype of worker i derived profi maximizaion by a repreenaive firm; equalizing labor demand and labor upply deermine he equilibrium wage rae and employmen for each ype of worker. The model relie on a e of andard aumpion: - Oupu i produced wih a conan reurn-o-cale producion funcion wih wo facor, phyical capial and a compoie labor inpu (fir age). The labor inpu i a need CES (conan elaiciy of ubiuion) producion funcion of high-killed and low-killed labor (econd age). High-killed and low-killed labor inpu are hemelve need CES combinaion of naive and foreign labor force (hird age). Thi need CES framework ha been ued in many recen empirical udie of he labor marke effec of immigraion and ha been applied o many counrie. I ued a Cobb-Dougla funcion in he fir age. - Phyical capial i inernaionally mobile (i upply i perfecly elaic) and each ingle deinaion counry i aumed o be oo mall o affec global capial marke. I follow ha reurn o phyical capial are equalized acro counrie. Thi arbirage condiion deermine he ock of capial per worker in each economy. 16

18 When hi amoun i plugged ino he fir age producion funcion, oal producion can be expreed a he produc of oal facor produciviy (TFP) by he labor inpu. - Toal facor produciviy (he cale facor in he producion funcion) i an increaing funcion of he proporion of college graduae in he labor force. - Each counry i a ingle labor marke and he profi-maximizing labor demand funcion i uch ha he equilibrium wage rae i equal o he marginal produciviy of labor for each ype of worker. - A far a labor upply i concerned, I aumed ha he paricipaion rae of each naive worker i an increaing log-linear funcion of he wage rae (an oucome of he individual uiliy maximizaion program). Thi allow me o predic he labor marke impac of migraion accouning for employmen repone of naive. Simple labor demand, labor upply and wage equaion can eaily be derived from he model. The parameer of hee equaion mu be calibraed o mach counry-pecific daa on oal producion, paricipaion rae, ize and educaion rucure of he working-age populaion. Then, aring from he baeline equilibrium, counerfacual cenario wihou immigraion can be imulaed o quanify he wage and employmen repone o immigraion. In hi cae, I calibraed he model on he year 2000, and hen imulaed he counerfacual labor marke equilibrium when ne immigraion flow oberved in he nineie (decribed in Table 2, column 1 and 2) are equal o zero. Simulaion reul depend on he value of four imporan parameer: he elaiciy of ubiuion beween highly- and le-educaed worker (econd age of he producion funcion), he elaiciy of ubiuion beween naive and immigran wih he ame educaion level (hird age of he producion funcion), he elaiciy of oal facor produciviy o he proporion of college graduae in he labor force, and he labor upply elaiciy o wage of more and le educaed naive. The lieraure provide a wide e of eimae for hee elaiciie. The value ued in my imulaion are hu choen o pan he range found in he empirical lieraure. I defined hree cenario: a peimiic cenario combining elaiciie maximizing he negaive impac on naive (or minimizing he poiive impac), and opimiic cenario maximizing he poiive impac (or minimizing he negaive impac), and an inermediae cenario baed on he average of he eimaed elaiciie. Table 4 give he parameer value ued in he hree cenario. Figure 2 preen he reul for he wage effec of immigraion under hee hree cenario. Figure 2.a give he effec on le educaed naive; Figure 2.b give he average effec on all naive. Figure 3 preen he reul for he employmen effec of immigraion. 17

19 Table 4. Parameer value in hree cenario Peimiic Inermediae Opimiic Elaiciy of ubiuion beween college graduae and he le educaed Elaiciy of ubiuion beween immigran and naive Elaiciy of TFP o human capial Elaiciy of labor upply o wage A number of inereing feaure emerge. Fir, all imulaed wage effec on le educaed naive (wih he excepion of Eonia, Lavia, and he "peimiic" cenario for Auria, Eonia and Lavia) are poiive. Thi indicae ha in virually all counrie, le educaed naive worker are likely o benefi from he labor marke impac of recen immigraion. For ome counrie wih high immigraion rae (uch a Ireland, Canada, or Auralia), he wage gain for le educaed naive are quie ignifican and reach value a high a 6%. For oher counrie wih inermediae level of immigraion, uch a Belgium, he Unied Kingdom, and Swizerland, he effec are non-negligible and are beween 1 and 2%. The median effec on he wage rae for le educaed worker range from 0.2% in he peimiic cenario o 0.8% in he opimiic cenario (ee Figure 2.a). The effec on he average wage of naive are poiive in he opimiic cenario. The gain exceed 3% in counrie like Canada, Ireland and Auralia. The effec on average wage i lower becaue highly educaed naive experience a wage decreae or lower gain (ee figure 2.b). The magniude of he wage effec of immigran depend criically on he raio of he highly educaed o he le educaed among he immigran. Counrie where law explicily favor more educaed immigran (uch a Auralia and Canada) experience larger poiive effec for boh he le educaed naive and he oal workforce. However, oher counrie wihou uch explici law (uch a Ireland, UK, and Swizerland) alo enjoy ignifican poiive effec ince he compoiion of heir immigran i alo iled oward he highly educaed. On he oher hand, if he kill compoiion of immigraion flow i no biaed in favor of he educaed, hen he ne wage effec on naive become quie mall albei poiive. In figure 3.b, he effec on employmen have he ame qualiaive feaure a he wage change bu hey are maller in magniude. They range beween 0 and 0.5% in mo of he counrie in any cenario. Thi analyi doe no uppor he view ha recen immigraion conribued o increae inequaliy hrough he labor marke. In virually all high-income OECD counrie, i i likely ha recen immigraion ha increaed income of he le educaed and decreaed income of he riche. The imulaion reul are fully deermined by he compoiion of recen immigraion flow and by he choen parameer. Alhough he elaiciy of labor upply o wage ha almo no effec on naive employmen, elaiciie in he producion funcion govern he reul. However, when elaiciie vary o pan he range of eimae found in he 18

20 empirical lieraure, he wage repone i poiive almo everywhere and he gain are nonnegligible in many counrie. The imulaed wage and employmen effec of immigraion are obviouly ubjec o cavea and poible meauremen error. Migraion daa i le han perfec. For example, ome emigraion flow o ome poor counrie are impued, undocumened migran are no fully meaured among immigran, and chooling i an imperfec meaure of acual kill. In addiion, he imulaion exercie conider daa from he 1990 which mie ome recen large immigraion flow from Norh Africa and he Middle Ea o Europe, and from Lain America o he US. Thee recen immigran cohor are alo believed o be le educaed which would influence my reul. Docquier, Ozden and Peri (2013) have underaken a erie of robune check o accoun for all hee iue (downgrading educaion acquired in poor counrie, accouning for illegal immigran, uing labor force urvey daa for he period ). None of he correcion eliminae or revere (alhough ome may aenuae) he finding of poiive long-run effec of immigran on he mean wage and employmen of naive worker, and more beneficial effec for he le educaed. Oher globalizaion mechanim mu be ued o explain he oberved increae in income inequaliy (uch a rade, foreign direc invemen and heir effec on he demand for lowkilled-inenive good in rich counrie). A documened in Table 2, preence of older generaion of migran migh have induced derimenal effec on income inequaliy in Weern European counrie where pa immigraion wa biaed oward he le educaed (epecially in counrie uch a Auria, Belgium, France, Germany). Thi i no he cae of counrie where elecive immigraion policie were conduced, Scandinavian counrie and emerging counrie. 19

21 Figure 2. Wage impac of ne immigraion flow on naive worker 2.a. Percenage effec on le educaed naive wage 2.b. Percenage effec on average naive wage 20

22 Figure 3. Employmen impac of ne immigraion flow on naive worker 3.a. Percenage effec on employmen of le educaed naive 3.b. Percenage effec on employmen of all naive 21

23 3.2. Fical impac of immigraion The analyi of he fical impac of immigraion ha been conduced in fewer udie. Diinguihing he hor-run and long-run fical effec of immigraion i a complex ak. Cro-counry comparaive udie have focued on he hor-run effec, i.e. change in public finance relaed o he preence of immigran of he fir generaion. Barbone e al. (2009) ued houehold urvey daa on average income and axe paid and benefi received by migran and naive houehold o quanify he fical impac of immigraion in a large e of European counrie. The auhor found no evidence upporing he view ha European immigran conribue le in axe han he naive, or conume ignificanly higher benefi. On he conrary, hey found ha migran worker make a ne conribuion o he naional ax and benefi yem of European Union counrie. Thee reul have been confirmed in oher counry-pecific udie howing ha he fical impac of immigran i poiive albei mall, in he Unied Sae (Auerbach and Oreopoulo, 1999) or even in non-elecive immigraion counrie uch a France, Spain or Germany (ee Chojnicki, 2006, Colado e al., 2003, or Bonin e al., 2000). Chojnicki udy i he mo deailed one. Fir, i dienangle public expendiure ino wo caegorie, public ranfer/benefi direcly allocaed o individual (including educaion ubidie) and he reidual governmen conumpion (juice, miliary pending, infrarucure, ec.). Populaion change direcly impac axe and public ranfer, bu have uncerain effec on he amoun of reidual governmen conumpion. When immigraion i doubled, he overall fical impac i poiive if he reidual governmen conumpion i kep conan; he impac i negaive albei mall if he reidual conumpion i proporional o oal populaion. Second, i idenified ne axe (i.e. oal axe minu ranfer/benefi) paid by immigran wih college, econdary and lower educaion. Reul for he year 2000 are preened on Figure 3. Figure 3. Ne axe paid by migran and naional in Euro, France

24 Working-aged educaed immigran conribue more han he average naive. On he conrary, he le educaed conribue le han naional, alhough heir ne conribuion i poiive. Over heir lifeime and in dicouned value, low-killed permanen migran receive more han wha hey pay. However a permanen enry of young low-killed immigran can be beneficial for public finance if he reidual public conumpion doe no increae oo much Immigraion and developmen policie Several opinion urvey on aiude oward immigran reveal ha ho-counry ciizen believe ha immigran induce derimenal effec on he labor marke and public finance. They ee immigran a aking heir job away, or inducing downward preure on heir wage. Some en year ago, he Eurobaromeer Opinion Poll on Racim and Xenophobia in Europe revealed ha one hird of European openly decribe hemelve a quie raci or very raci ; anoher hird decribe hemelve a a lile raci. Fear of becoming unemployed and inecuriy abou he fuure are among he main characeriic of hoe a he op of he racim cale. Thee preumpion are no new and probably dae back o he agflaion epiode of he evenie. They are invalidaed by a majoriy of academic udie. Thi migh reflec he mipercepion ha ciizen have abou immigraion. For example, he TTI urvey (Tranalanic Trend/Immigraion, 2009) how ha he va majoriy of reponden groly overeimae he hare of immigran in heir counrie by a facor around wo. American hough ha 35 percen of he populaion in he U.S. i foreign born, Canadian eimaed 37%, and European eimaed an average of 24%. The acual hare are around 14, 20 and 10 percen, repecively. I i he reponibiliy of policymaker o inform ciizen ha he labor marke and fical impac of immigraion are in fac low for naive, and even beneficial in many cae. Thi doe no mean ha unrericed immigraion would no generae negaive effec. Bu a he curren level of immigraion, he economic effec are likely o be poiive for naive. If immigraion, legalizaion or aylum eeking policie had o be more rericive, i can only be juified by non-economic moive (crime, averion for diveriy), which are difficul o quanify. Obviouly, elecive immigraion policie could be ued o increae he benefi from immigraion in rich deinaion counrie. On he conrary, increaing he number of low-killed immigran o OECD counrie would reduce he ize of he beneficial effec for naive and could even induce income loe. However, i could be he ource of large gain for migran, heir familie and, mo imporanly, for he ending counrie. By relaxing labor marke conrain a origin and increaing he amoun of remiance, lowkilled migraion could be een a an explici componen of he developmen policy of he rich world. In he Global Economic Propec, he World Bank repored ha inernaional remiance received by developing counrie (around 170 billion US dollar in 2005, wo hird of which wa en from developed counrie) have doubled ince In 2005, he amoun of remiance wa wice a large a he amoun of official developmen aid. Record ill undereimae he full cale of remiance: unrecorded flow hrough informal channel 23