Global Economy and Business MOBILITY AND MIGRATION

1. Global Economy and BusinessMOBILITY AND MIGRATION • Prof.ssa Luisa Natale • http://www.docente.unicas.it/luisa_natale/ • Email oli59@mclink.it

2. MOBILITY AND MIGRATION • THEORIES AND INTERNATIONAL MIGRATION

3. THEORIES 1. The Economic approach 2. The Sociological approach 3. The mobility transition 4. The Contribution of political science

4. 1. The economic approach “The migration of workers is caused by differences in the supply of and demand for labour in different locations” (A. Smith)

5. An Inquiry into the Nature and Causes of the Wealth of Nations), 1776

6. The economic approach 1. The Neoclassical Theory of migration 2. The New Economic of Migration 3. Family Migration and Selectivity of Migration 4. The Dual Labour Market Theory 5. The World System Theory

7. The Neoclassical Theory of MigrationMain proponent: Hicks (1932) The existence of wage differential across the space is the main cause of immigration

8. 1. The Neoclassical Theory of migrationMain proponent: Harris-Todaro (1976) • Level of analysis: macro • Type of migration: internal or international labour migration • These studies argue that migrants make a rational decision by moving in the direction where they are expected to get the highest benefits • As a result of that movements, the supply of labour decreases and wages rise in the countries of origin, the supply of labour increases and wages fall in the countries of destination, leading eventually to a new equilibrium. At that point international migration ceases

9. 1.The Neoclassical Theory of migration (to be continued) • Micro counterpart • Migrant is a racional actor and decides to migrates on the basis of cost-benefit calculations • People move to wherever their skill can be more productive. They must invest in their migration wich involves tangibile and intangibile costs (cost of travel, of research of job, of adaptation to a new enviroment)

10. Net returns (NT) • NT are estimated as the difference between expected earnings in the country of destination and expected earnings in the country of origin • The subtraction of estimated costs leads to a measure of the expected gains from migration

11. Expected earnings in the country of destination Expected earnings in the country of destination estimated on the basis of an individual’s skills multiplied by the probability that individual gets a job at destination

12. Expected earnings in the country of origin Expected earnings in the country of origin estimated on the basis of an individual’s skills multiplied by the probability that individual gets a job at country of origin

13. Limitations • This theory does not take into account the international political and economic environment, as well as the effects of state level economic and political decisions that influence individual decision regarding migration (Papademetriou and Martin 1991). • There is homogeneity of skills between area of origin and area of destination. The labour is completely interchangeable. It’s true? • Level of analysis: macro • Unit of analysis: country

14. 2. The New Economics of MigrationMain proponent: Stark and Taylor (1989) • This theory assumes that people act, within households or families, to maximize expected income and to minimize risks by diversifying the allocation of family labour • Households diversify risks • Remittances can also help the community of origin

15. 2. The New Economic of Migration (to be continued • Migration is considered to be particularly important in developing countries where capital markets are week, many people do not have access to banking services

16. 2. The New Economic of Migration (to be continued • Household send family members to work abroad • to improve income in absolute terms • to increase income relative to others households in a reference group

17. 2. The New Economics of Migration (to be continued • If in a community the income of aflluent households increases, whereas that of poor households remains unchanged the relative deprivation of the latter increases and their incentive to partecipate in international migration rises as well, even if no change in expected wages takes place.

18. 2. The New Economics of Migration • Limitations: • The studies available focus on the experience of just a handful of rural communities, which are not selected to be representative of the whole population • Level of analisys: micro • Unit of analysis: family

19. 3. Family Migration and Selectivity of MigrationMain proponent: Mincer (1978) • Movements of complete family. • Difference between the individual’s and the couple’s optimal strategy depends on the degree of correlation in the gains from migration of the husband and wife. When there is perfect correlation do the optimal strategies of the individual and the married couple coincide. • Level of analysis :micro • Unit of analysis : family/couple

20. 3. Family Migration and Selectivity of Migration • If income inequality is greater at place of destination, • “People with higher than average skills have an incentive to migrate because they can earn a higher relative wage in area of destination”. • If income inequality is greater at place of origin, such person have less incentive to migrate than those with lower skill

21. . Family Migration and Selectivity of Migration • When married couples are considered, the selectivity effects weakens because some low-skilled who would not have migrated on their own to a place with a high level of income inequality may do so if they are married to skilled person

22. “… migration is the result of rational choices made by individual or family” According to : • The neoclassic economic theory of migration • The new economics of migration

23. 4. The Dual Labor Market TheoryMain proponent: Piore (1979) • International migration is mainly the product of international force that transcend individual choice and set constraints on it. • International migration results from a permanent demand of foreign labour that is inherent to the economic structure of developed countries • Structural constraints at destination reduce social mobility • Level of analysis: macro • Unit of analysis: country

24. 4. The Dual Labor Market TheoryMain proponent: Piore (1979) • Several factors contribute to create structural demand for foreign workers

25. 4. The Dual Labor Market TheoryMain proponent: Piore (1979) • A) Wages not only reflect condition of supply and demand. • They also confer status and prestige. Consequently to preserve an established occupational hierarchy, wages cannot simply respond freely to changes in the supply of workers. • Employers seeking to attract unskilled workers cannot for jobs at the botton of hierarchy cannot simply raise wages because by so doing they would change the defined relationships between status and reminaration • The cheaper solution the importation of foreign workers to work for low wages.

26. 4. The Dual Labor Market TheoryMain proponent: Piore (1979) • B) Wages not only reflect condition of supply and demand, Foreign workers from low income countries are usually willing to satisfy that need because even a low wage in developed country can be several time greater than the average wage in developing country

27. 4. The Dual Labor Market TheoryMain proponent: Piore (1979) • Coexistence of a capital intensive primary sector and of a labour intensive secondary sector. Segmented labour market. Workers in second and or in low-productivity be laid off at any time. They became the means of adjustment during cyclical downturns. Experience of labour importing countries of Europe during the late 1950s and 1960s through official recruitment programs. Ethnic enclaves

28. Migration theories and the role of demographic factors One exception: the dual labour market theory (Piore 1979, Massey et al. 1993) emphasis on the socio-demographic dynamics of the labour force as a factor shaping demand for migrant labour supply in the ‘secondary’ labour market provided by specific socio-demographic groups: women (before marriage or first birth), teenagers and rural-urban migrants

29. 5. The World System TheoryMain proponent: Wallerstein (1970/80) World-system refers to the international division of labor, which divides the world into core countries, semi-periphery countries periphery countries.

30. 5. The World System Theory

31. The core , The Core is the place where resources and wealth masses. The Core has high technological development and it creates complex technological products • Core countries focus on higher skill, capital-intensive production

32. The core • Europe gained control over most of the world economy, presiding over the development and spread of industrialization and capitalist economy, indirectly resulting in unequal development • Demand for cheap labor arises (agricolture, service base, etc.)

33. The core Unites States and Europe gained control over most of the world economy, presiding over the development and spread of industrialization and capitalist economy, indirectly resulting in unequal development

34. 2012

35. The Periphery • The source of cheap labour, raw minerals and agricultural products that serve the Core. • focuses on low-skill, labor-intensive production and extraction of raw materials

37. Fromthe Periphery to the Core • In the peripheral countries, the commercialization of agricultural production leads to land consolidation, the substitution of cash crops for staples • Mechanization of agricultural reduces the labour demand • Rural-urban migration in peripheral area

38. Fromthe Periphery (PA) to the Core Growing urban labour force in PA difficult to absorb ↓ Rise in unemployment/underemployment ↓ Marginalisation of many families → Unmet labour demand in Core → PA → Core international migration

39. 2. The Sociological approachMain proponent: Lee • Conceptual approaches in migration research include push and pull factors as determinants to explain contemporary migrations. • Both areas of origin and destination are characterized by sets of positive factors (pull factors), or forces of attraction, and negative factors (push factors), or forces of repulsion

40. Push factors (1) caused by a variety of reasons: • economic causes – income inequality between developing and developed countries - • demographic causes - Population pressure in area leads to out migration • political changes, for example the collapse Berlin’s Wall (1989)

41. Push factors (2) • geographical causes as proximity, migration is an inverse function of distance; • evaluation of place utilities and disutilities plays an important role in migration decision

42. Macro explanations1. Push/Pull factors - Demographic imbalances Economics imbalances Political factors In the origin country Sustained demographic growth high potential labour supply Unemployment, underemployment, low lyfe style High pressure towards emigration 42

43. Diagram 1 Diagram 1

44. Pull factors caused by a variety of reasons: • Segmented Demand labour market – low skilled • Migratory chain, Family riunification • Weak immigration law system (no boundaries control)

45. Political change Demographic reasons Economic reasons Economic reasons Population pressure in area leads to out migration Asylum seeking Income inequality between developed countries and developing countries Push factors Contemporary Migration The collapse Berlin’s Wall, 1989 Pull factors Geographical proximity Black market Weak immigration law system Segmented Demand labour market – low skilled Migratory chaine, Family riunification

46. Some lessons from the literature There is limited theoretical understanding and empirical evidence of the impact of demographic trends on migration. Emphasis on demography as a ‘push’ factor Demographic ‘pull’ forces have been particularly neglected A demographic gap is neither necessary nor sufficient for migration to take place The socio-demographic composition of the workforce matters more than overall numbers

47. Network approach • Network connections can be considered as a form of social capital that people can draw to gain information, material or psychological support • to facilitate migration and the adaption process. • Level of analysis: micro • Unit of analysis: individual

48. Is there any correspondance between labour workforce demand countries and attractives immigration countries? 48