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International Migration: a Destination Country and Migrant Perspective

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International Migration: a Destination Country and Migrant Perspective International Migration: a Destination Country and Migrant Perspective PhD dissertation by Mette Foged Department of Economics University of Copenhagen March 7, 2014 Acknowledgements My interest in the Economics of Migration started when I gathered valuable experience working as a research assistant for Martin Munk, Panu Poutvaara and Martin Junge. I am thankful to them for introducing me to migration as a research field and for letting me use their novel survey data on \Danes Abroad" in the first chapter. I spent January to May 2012 at the Centre for Research and Analysis of Migration, University College London. I learned a tremendous amount during that stay and I would like to thank Christian Dustmann for hosting me and giving me that opportunity. Following his course on the Economics of Migration and getting feedback from him on my own work gave me insights that I build on today. The excellent group of young scholars at CReAM was a further inspiration for me. I appreciate very much their well-coming attitudes and enjoyed interacting with them during my stay and at conferences and workshops. Later in my PhD, I had two very productive stays at University of California Davis thanks to the hospitality of Giovanni Peri, the other faculty and PhD students at the economics department (September 2012 to January 2013 and again September/October 2013). The collaboration and Gio- vanni's enthusiasm have been crucial to my development as a researcher. The numerous, educational discussions and his encouragement made me work harder, be more determined and motivated. The Department of Economics, University of Copenhagen, offered an excellent research environ- ment. The academic discussions and the invaluable coffee breaks with close colleagues made everyday at the office a lot of fun. I am indebted to my supervisors Jakob Roland Munch and Søren Leth- Petersen for their most valued advice. Jakob's knowledgeable guidance and support and Søren’s ability to spot the weak points of an argument and push me forward greatly improved my projects. My project with Giovanni Peri benefitted from financial support from EPRN. I also acknowledge travel grants from Augustinus Fonden and Oticon. Finally, I thank my family and friends, and my boyfriend, Mads, for his loving support and understanding. All this work had not made sense for me if you had not been there. Mette Foged Summary This dissertation is comprised of three self-contained chapters in the Economics of Migration. The two first take the perspective of the migrant and analyze the decision to migrate and its consequences for labor market outcomes. The last chapter consider the impact immigration has on natives in the destination country. Chapter 1 \International Return Migration and the Effects on Earnings" investigates the economic incentives for international return migration from a high wage country, more specifically Denmark. I follow the migrants abroad and link labor market outcomes to reasons behind emigrating and work- activities abroad. The impacts on earnings and employment are negative the first one-two years after return. Male migrants overtake their peers who did not go abroad within a few years, while women experience long-lasting negative returns to their international experience. This seem to reflect gender differences in reasons behind emigrating and consequently differences in the labor-market value of the international experience. Men migrate for job-related reasons, the majority due to a job-transfer, and most women are accompanying their partner in the migration decision. Similarly, men possess very high skilled jobs abroad and women take low skilled jobs or stay at home looking after the children. This is surprising because Denmark is a highly gender-equal country by international standards and all individuals were in the labor force prior to migrating. The next chapter sets out to understand these gender-patterns among international migrants. Chapter 2 \Family Migration and Relative Earnings Potentials" considers the mobility of dual- earner households. I show that couples are more likely to migrate if household earnings are dispro- portionately due to one partner. Furthermore, families react equally strong to an increase in the male or the female relative earnings advantage within the household. This is evidence in favor of the human-capital model of family migration, that is completely gender-neutral and symmetric in the private gains to husbands and wives. It contradicts another prevalent hypothesis, namely that migra- tion is husband-centered and biased towards husbands' private gains from mobility. The seemingly lower weight on wives' private gains in the literature can (at least partly) be attributed to two facts: household earnings are lower among female headed households and highly educated women more of- ten than highly educated men find highly educated partners. The results hold for relocations between commuting zones in Denmark as well as for international migration of Danish couples. Chapter 3 \Immigration and Native Workers: New Analysis Using Longitudinal Employer-Employee Data" is coauthored with Giovanni Peri from University of California, Davis. This chapter makes progress on a central question in the Economics of Migration: the impacts of immigration on the labor market outcomes of native workers. We use the inflow of non-EU immigrants to Denmark, beginning in 1995 and driven by a sequence of international crises. The immigrants were very low skilled relative to the native population in Denmark and took mainly manual jobs. We find that the increased supply of low-skilled foreign workers pushed natives to pursue more complex and less manual-intensive occu- pations. The reallocation took place mainly through movement of individuals across firms and resulted in higher or unchanged wages for the native workers. Thus, immigration increased the mobility but we also find that it did not increase their probability of unemployment. Resum´e(Summary in Danish) Denne afhandling best˚araf tre selvstændige kapitler om de økonomiske determinanter og effekter af migration. De første to kapitler er nært beslægtede og analyserer henholdsvis, hvilke par der kan blive enige om at migrere internationalt eller indenfor Danmark (Kapitel 2) og hvilke konsekvenser den internationale mobilitet har for migranternes beskæftigelse og indkomst (Kapitel 1). Det sidste kapitel analyserer de effekter indvandring har for lønmodtagere i modtagerlandet, i dette tilfælde Danmark. Kapitel 1 \International Return Migration and the Effects on Earnings" undersøger de økonomiske incitamenter for international migration fra et høj-indkomst land, nærmere bestemt Danmark. Det danske register data kombineret med unikt survey-baseret data gør det muligt at følge migranter i udlandet og linke deres løn og beskæftigelse efter opholdet i udlandet til ˚arsagentil udvandringen og arbejdsaktiviteter under udlandsopholdet. Jeg finder signifikante negative effekter for alle migranter de første 1-2 ˚arefter genindvandring til Danmark. Derefter overhaler de mobile mænd, dem der blev hjemme, mens kvinderne har langvarige negative effekter af deres internationale mobilitet. Det ser ud til at afspejle kønsforskelle i udrejse˚arsagen.Mænd migrerer p˚agrund af deres arbejde, flertalet grundet udstationering, mens de fleste kvinder følger deres partner i den internationale vandring. Mændene har krævende job i udlandet som ledere eller i højt specialiserede jobs. Kvinderne derimod er oftest hjemmeg˚aendeeller tager mindre kompetance-krævende eller helt ufaglærte jobs, mens de er i udlandet. Dette er overraskenede, givet at Danmark i international sammenhæng har relativ stor lighed mellem kønnene og alle individer i undersøgelsen var p˚aarbejdsmarkedet inden udvandringen fra Danmark. Det næste kapitel giver en forklaring p˚adisse tilsyneladende stærke kønsmønstrer blandt internationale migranter. Kapitel 2 \Family Migration and Relative Earnings Potentials" tager udgangspunkt i hushold- ninger, hvor begge partnere er p˚aarbejdsmarkedet. Jeg viser, at migration er mere udbredt blandt familier, hvor den ene partner tjener størstedelen af husholdningsindkomsten. Stigningen i migra- tionssandsynligheden ved en stigning i indkomstuligheden indenfor husholdningen afhænger ikke af om indkomstudligheden er til mandens eller kvindens fordel. Dette resultat er konsistent med human- kapital teorien for mobilitet, som er fuldstændig kønsneutral og tilsiger at migrationssandsynligheden er symmetrisk i de to partners forventede gevinster ved mobilitet. Det modsiger en anden fremhersk- ende hypotese om, at familie-migration følger mandens jobmuligheder p˚agrund af faste kønsnormer. Den tilsyneladende højere vægt p˚amandens karriere, n˚arbetydningen af manden og kvindens karakter- istika analyseres, kan forklares af to vigtige faktorer der ikke i tilstrækkelig grad har været kontroleret for i literaturen: Familier hvor kvinden tjener mest har lavere indkomst, end familier hvor manden tjener mest, og de højt uddannede kvinder er oftere end højtuddannede mænd sammen med en liges˚a højtuddannede partner. Det gør dem mindre mobile. Resultaterne holder for interne flytninger mellem pendlingsoplande i Danmark s˚avel som for international migration af danske par. Kapitel 3 \Immigration and Native Workers: New Analysis Using Longitudinal Employer-Employee Data" tager fat p˚aet af de store spørgsm˚alom indvandring, nemlig betydningen af indvandring for de enkelte lønmodtagere. Dette kapitel er skrevet i samarbejde med Giovanni Peri fra University of California,
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