Out-migration and economic cycles
- 237 Downloads
Out-migration concerns foreigners who decide to leave a country where they used to live. Taking advantage of the OECD bilateral IMS database, we analyze the short-run determinants of out-migration using a panel of Schengen countries between 1995 and 2011. We find that out-migration is counter-cyclical: foreign nationals tend to leave host countries with high unemployment, while they are likelier to stay in good times (i.e. low unemployment). Typically, a 10 % increase in the unemployment rate leads to a 5 % increase in out-migration. Thus, short-term economic fluctuations have the same qualitative effect as restrictive migration policies in economic downturns. However, we find mixed evidence for the role of economic cycles in the potential destination countries of those flows. Movers appear to be sensitive to unemployment changes in their country of origin, but they do not seem to be sensitive to business cycles in potential destinations.
KeywordsMigration Outflows Business cycle
JEL ClassificationsF22 J61 015
We would like to thank Gianluca Orefice and the participants at the 4th OECD-CEPII Conference on Immigration in OECD countries for their useful advice and comments. The usual disclaimers apply.
- Beine, M., Bourgeon, P., & Bricongne, J. C. (2013). Aggregate fluctuations and international migration (CESifo working paper series 4379). CESifo Group Munich.Google Scholar
- Bertoli, S., Brucker, H., & Moraga, J. F. H. (2013). The European crisis and migration to Germany: Expectations and the diversion of migration flows (IZA discussion papers 7170). Institute for the Study of Labor (IZA).Google Scholar
- Borjas, G. J. (1987). Self-selection and the earnings of immigrants. American Economic Review, 77(4), 531–553.Google Scholar
- Dustmann, C., & Görlach, J. S. (2014). Selective outmigration and the estimation of immigrants’ earnings profiles. In B. R. Chiswick & P. W. Miller (Eds.), Handbook of the economics of migration. North-Holland: Elsevier.Google Scholar
- Hatton, T. J. (2014). Public opinion on immigration: Has the recession changed minds? (IZA discussion papers 8248). Institute for the Study of Labor (IZA).Google Scholar
- McKenzie, D., Theoharides, C., & Yang, D. (2014). Distortions in the international migrant labor market: Evidence from filipino migration and wage responses to destination country economic shocks. American Economic Journal: Applied Economics, 6(2), 49–75.Google Scholar
- OECD. (2009). International migration and the economic crisis: Understanding the links and shaping policy responses, international migration outlook 2009, pp. 11–76, OECD.Google Scholar
- OECD. (2013). International migration outlook 2013 (Technical report). Organisation for Economic Cooperation and Development, ParisGoogle Scholar
- Roy, A. D. (1951). Some thoughts on the distribution of earnings. Oxford Economic Papers, 3(2), 136–46.Google Scholar