Archive for the ‘Migration’ Category

WW1 and international migration

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Wednesday, June 25th, 2014

The latest contribution to the VoxEU series on the economics of World War I is available here.

To ungovern is to depopulate

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Friday, June 7th, 2013

There are costs and benefits to everything, even emigration at a time of economic crisis. We Irish have probably gotten so used to (silently) thanking our lucky stars that our young are not hanging around at home being unemployed (or at least, not to the same extent as the young in the Mediterranean), that we may have forgotten this. Indeed, I had forgotten that I wrote this back in 2010. But now Paul Krugman points us to this post (and see also this one) which brings up the issue, and it is worth thinking about it seriously.

Long run GDP and tax revenue may not suffer that much if people return home eventually, especially if they bring home new skills and contacts, but what if funding crises happen before then? And are we perhaps too optimistic about the prospects for return migration? My generation came home in droves because of the 1990s boom, but that sort of growth is obviously never going to be replicated: you can only catch up on the technological frontier once. And as I pointed out in that earlier post, there is scope for negative feedback loops here, related to the overhang of government debt.

All in all, another reason to think that debt restructuring is going to eventually have to take place around the Eurozone periphery.

(H/T Alan Taylor who suggested the title of the post. That is a clue as to what it refers to by the way.)

Friday Conference: Demography Session

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Wednesday, February 1st, 2012

The podcast and slides from the session on demography at the Friday conference are below.

Podcast

Chair: Kevin Denny (UCD)

Orla Doyle (UCD)
Early Educational Investment as an Economic Recovery Strategy

Alan Barrett (ESRI/TCD)
The Costs of Emigration to the Individual: Evidence from Ireland’s Older Adults

Brendan Walsh (UCD)
Well-being and Economic Conditions in Ireland

Revealed preferences for climate

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Saturday, November 26th, 2011

Eight academic economists have left Dublin in recent months or will leave shortly. That may seem like a small number, but there are only 200 or so academic economists in the country. They all have moved / will move to warmer places: Stirling (2.0K warmer on average than Dublin), Brighton (2.2K), Oxford (2.2K), Canberra (3.4K), Melbourne (5.3K) and Lisbon (7.0K). Dublin economists thus disregard the opinion of the European Union that a climate change of 2.0K is dangerous.

Between 1998 and 2009, intra-union migration has been towards warmer places. The average migrant in the EU experienced a warming of 0.6K. The average masks a wide spread. About 10% of migrants stayed in roughly the same climate, 17% experienced a cooling of 2K or less, and 16% a cooling of more than 2K. 24% experienced a warming of less than 2K, and 33% a warming of more than 2K. 450,000 people opted to live in a climate that is more that 5K warmer than what they were used to.

Obviously, one cannot compare the individual impact of moving to a warmer climate with the impact of global warming, but at the same time it is clear that both Dublin economists specifically and intra-European migrants generally do not object to a warmer environment.

City climate data from World Guides. Country climate data from the Climate Research Unit. Migration data from EuroStat, for Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Austria, Poland, Romania, Slovenia, Slovakia, Finland, Sweden, United Kingdom.

Pay for performance in academia

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Friday, October 7th, 2011

Last week, I linked to two papers, one showing that students prefer to enroll in highly ranked universities, and another one showing that a generalization of the Hirsch index partly explains who gets tenure where.

Brian Lucey led me to another paper, by Daniel Hamermesh, to be published in Economic Inquiry. Hamermesh links remuneration to performance, showing that more prolific authors earn more (but this effect levels off). The relation between citations and pay is more intriguing. At the lower end of the pay range, the total number of citations matters. At the higher end, the most cited paper dominates. This makes sense: Prizes are given for the one paper that changed everything.

What has this to do with Ireland? In the USA, academic contracts are individual. In Ireland, contracts are collective. Pay is set by grade and seniority. This implies that only the more productive and more influential Irish academics can get a competitive offer from the USA. Recent cuts in net pay have priced a larger fraction of Irish people into the international market. Irish universities thus run the risk of losing their best people, and we have seen some of that already.

Preliminary Census Results Analysed

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Sunday, July 3rd, 2011

Three related posts readers of this blog should be interested in.

First, IrelandafterNama show and describe the geographic variation we see within the preliminary Census results (which are here; initial comments on this blog with hat-tipping to JtO here).

Second, the ever-excellent NAMAWineLake gets sociological on us in a fascinating post on growth of household sizes and why we need an extra 17,000 houses a year.

Third, Seamus Coffey thinks about what an extra 100,000 people means for our economic indicators.

Migration Estimates

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Thursday, February 24th, 2011

This is an addendum to John McHale’s last post and a response to JTO’s plea for more real data on this site. Below is a consistent series (based on CSO data) for the net migration rate from 1961 to 2010.  The net flow has been expressed as a rate per 1,000 average population. The years are to end-April.
We await with great interest the results of the 2011 Census, which will give us a fix on the migration trend for the year ending April 2011 and allow the estimate for 2002 to 2010 to be updated. 
Preliminary Census results should become available by the end of the summer.

Irish Remedy for Hard Times: Leaving

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Thursday, February 24th, 2011

The Wall Street Journal carries an extensive article on Irish emigration.

Migration, the limits of internal devaluation, and the bailout

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Sunday, November 28th, 2010

It is time to dust off old ways of thinking about the Irish economy that were useful in the past.

In the long run, migration sets a floor to Irish wages. It has been thus ever since the Famine of the 1840s, and I don’t believe that the Irish have become less mobile in the last 20 years. Now, a lot of Irish wages are still high by international standards, but eventually as ‘internal devaluation’ proceeds, and as peoples’ living standards are lowered as a result of tax hikes and cuts to public services, it seems inevitable that the ‘migration constraint’ will start to bind again.

Once this happens, then very roughly speaking the size of the Irish economy will be largely governed by relationships of the following sort:

w(1-t) + b + P = E

where w is the wage (which determines employment and output, for given levels of the capital stock and technology); t is the tax rate; b is the value to workers of the public services they receive; P is the premium we enjoy as a result of living in Ireland; and E is the living standard which we can enjoy overseas. If the left hand side of this equation falls too far below the right hand side, people will leave until equilibrium is re-established.

Once we hit this constraint, either because w falls, or t increases and b declines, adjustment in the economy will be more quantity-based and less price-based than it has been to date.

And it gets worse, since t and b depend inter alia on the levels of output and employment. There are fixed costs to running a state, and the debts we are now being saddled with are not population-dependent. You don’t have to be Paul Krugman to see the potential for some pretty nasty feedback loops here.

What can politicians do? The most obvious thing to do is to minimize the debt overhang facing this State, so that t is not higher, and b is not lower, than they otherwise would have to be. Less obviously, if politicians — not the existing ones, obviously, but an entirely new political class — can increase P, by providing people with a political project for national renewal that they can buy into, this might also help convince some people at the margin to stay at home. This is not just essential for our democracy, but for the economy as well.

QEC Autumn 2010

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Thursday, October 21st, 2010

The latest QEC is here. Here’s the press release:

  • We expect that GNP will contract by 1½ per cent this year. For GDP, we expect a decline of ¼ per cent. For 2011, we expect GNP to grow by 2 per cent and for GDP to grow by 2¼ per cent.
  • We expect that employment will average 1.86 million this year, down 68,000 from 2009, a fall of 3½ per cent. We expect the rate of unemployment to average 13¼  per  cent. For 2011, we expect the number employed to average 1.85 million and the rate of unemployment to average 13½  per cent.
  • In the year ending April 2010, the CSO recorded net outward migration to have been 34,500. This was well below our forecast of 70,000. We discuss how this figure of 34,500 seems to be a conservative estimate of the rate of outflow when compared with estimates of migration contained in another CSO publication, namely, the Quarterly National Household Survey. We expect the net outflow in the year ending April 2011 to be 60,000. This is an increase of 10,000 on our earlier forecast for the year ending April 2011.
  • The General Government Deficit is expected to be 31 per cent of GDP this year, a truly dramatic figure. Of course, almost two-thirds of this is a one-off extraordinary item related to the banking bailout. For 2011, we expect the deficit to be 10 per cent of GDP, based on a budgetary package of €4 billion in savings.
  • In our General Assessment, we look at the budgetary challenges facing the country and in particular at the prospects of bringing the deficit down to sustainable levels in a reasonable timeframe. Using the “Low Growth” profile as published by the ESRI in July 2010, we assess what level of savings will be required to achieve a deficit of 3% by 2014. Our calculations suggest that savings of up to €15 billion could be needed, i.e., twice the sum that was under discussion at the time Ireland and the Commission agreed to the 2014 deadline.
  • We express a concern over the potential negative impact on the economy of this scale of adjustment over this period of time.
  • While the 2014 date strikes us as worryingly ambitious, we are mindful that an extension is highly unlikely and so we must operate within the constraints as presented. Although we have based our forecasts on a budgetary package of €4 billion of savings, it could well be that a higher amount will be sought. Whatever it is, the scale of the task is such that there will be a need for adjustments in current and capital spending and in taxation.

Don’t forget to read the articles in the Research Bulletin.

Exit, voice, loyalty and Ireland

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Saturday, October 16th, 2010

I don’t agree with everything in this article, by any means, but it is thought-provoking and topical. And I definitely agree with the authors about the brilliance of Albert Hirschman.

Besides, it gives me an excuse to post a link to this piece from April.

CSO Population and Migration Estimates

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Tuesday, September 21st, 2010

Also from the CSO today, estimates of population and migration for the year ending in April 2010. The headline figure that will attract the most attention is net outward migration of 34.5 thousand, the largest figure since 1989.

Retaining Talent

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Thursday, December 17th, 2009

Yesterday’s QNHS (Q3 2009) release provides a timely update on trends in the immigrant workforce.   In the period from the third quarter of 2008 the number of non-Irish nationals in employment fell by 61,600.   This is equals half the fall in the employment of Irish nationals (123,200), even though non-nationals represented only 13.6 percent of the workforce in Q3 2008.

It is also evident that many immigrants are returning home, with the total population of non-nationals (15 and over) falling by 41,000 over the year.   This might be welcomed in the short run if it limits the rise in unemployment.   But returnees also ease the downward pressure on wages.  Over the medium term, it is not a bad rule of thumb to view a country’s equilibrium unemployment rate as independent of the size of its labour force. 

Looking to the longer term, the return to net emigration is a worrying development.   As is often observed, Ireland’s high degree of factor mobility makes the economy operate more like a regional than a typical national economy.   An expanding skilled workforce gives the economy the scale, diversity and connections to support innovation-intensive growth.   Indeed, the empirical regional/city growth literature points to initial human capital as a strong predictor of subsequent growth (see here).   A truly smart “smart economy strategy” will recognise the value of getting–and keeping—talented people here. 

ESRI Budget Perspectives 2010 conference

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Tuesday, October 13th, 2009

This ESRI conference is taking place this morning.

The new Governor Patrick Honohan delivered an opening address which provides an interesting analysis of the Irish economic and fiscal situation: his speech is here.

The ESRI has also released its new quarterly forecast: here.

The conference also features a number of research papers, which can be found here.

In addition,  there was a roundtable on the Commission on Taxation Report: my contribution to that roundtable is available here.

Migration is endogenous

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Friday, September 18th, 2009

Jim O’Leary writes about migration here.