brain drain remittances and fertility this paper analyzes the effects of skilled migration and remittances on fertility decisions at origin we develop an overlapping generations model which accounts for endogenous fertility and education parents choose the number of children they want to raise and decide upon how many children obtain higher education only high skilled individuals migrate with a certain probability and remit to their parents we find that an increase in the probability to emigrate leads both high and low skilled parents to send more children to obtain higher education however the effect on the number of children is ambiguous in a further analysis we calibrate the model to match different characteristics of a developing economy when the destination country relaxes the immigration restrictions more high skilled individuals leave the origin country the result is that at origin increased high skilled emigration reduces fertility and fosters human capital accumulation

extending a lifeline or cutting losses the effects of conflict on household receipts of remittances in pakistan summary i examine the causal effects of long term exposure to conflict measured at the micro level on households receipt of remittances among households residing in areas affected by the 2010 floods in pakistan using a dataset of 7802 households representative of all flood affected areas of pakistan in 2010 i employ iv estimation to overcome the endogeneity of conflict exposure and remittance receipts and control for a range of confounding factors i find that contrary to the literature from country level case studies long term exposure to conflict reduces households likelihood of receiving any remittances at all as well as the average amounts of remittances received however for households in the lowest food consumption expenditure quintile conflict has a positive effect on the likelihood of remittance receipts which provides evidence for the existence of heterogeneous effects as well as a significant micro macro gap in understanding the causal effects of conflict on remittance receipts

the export effect of immigration into the usa much has been written on the connection between migration and international trade human history provides important examples of migrations leading to increased trade activity with perhaps the most well known example of the overseas chinese this study investigates the trade related importance of chinese and other immigrants into the usa previous studies may have underestimated or overestimated the relationship between trade and migration with nations treated as featureless plains rather than as varied landscapes this study contends that an understanding of the immigration trade relationship can be improved upon by examining the specific pattern and destination of immigration into specific us states using state level export data to 28 immigrant source countries in 1993 a strong immigration trade link is found reinforcing conclusions made by previous research using country level data the compelling connection between immigration and trade found in this study and others suggests that future change

immigrant trade links transplanted home bias and network effects macro level data for the us and 73 trading partners spanning the years 1980 to 2001 is used with a gravity specification to investigate the influence of immigration on bilateral trade prior research has identified immigrant stocks as a significant determinant of trade however this study indicates that the us immigrant trade link is driven by immigration from relatively low income countries a 10 increase in the immigrant stock is found to generate respectively 4 7 and 1 5 increases in domestic imports from and exports to the typical low income home country the observed link is decomposed into two hypothesized channels network effects and transplanted home bias considerable variation in per immigrant trade effects is found across home countries imports from the typical low income home country are estimated to increase by up to 2057 due to transplanted home bias and by as much as 2967 as a result of network effects while exports rise by up to 910 as a result of networks

remittances bonds and bridges remittances and social capital in burundi abstractthis study explores the effects of remittances on households structural social capital in urban burundi distinctions are made between bonding and bridging social capital referring to intra versus inter network ties of family members and friends the results demonstrate that remittance receiving households invest more in bridging social capital by participating in organisations donating time but make fewer monetary contributions compared to non receiving households remittances have mixed effects on bonding social capital receiving households give significantly less gifts to family members and friends but are more likely to send internal remittances compared to non receivers the implications of these findings for post conflict development are discussed

migration and child growth in rural guatemala this paper examines the relationship between migration and child growth in the rural highlands of guatemala a region with substantial international migration outflows significant remittance inflows and some of the highest rates of child undernutrition in the world using cross sectional survey data a double difference approach based on child growth patterns that controls for the selectivity of migration is used to assess the impact of migration to the us on height for age z haz scores and stunting prevalence of children haz scores for children in households with a migrant to the us are conservatively estimated to be 0 5 standard deviations higher and the prevalence of stunting is approximately 6 percentage points lower descriptive evidence suggests the possible channels through which migration may operate are improved food security and reduced morbidity

remittances investment and rural asset accumulation in pakistan internal and external migration can have a profound impact on rural asset accumulation in most third world countries in many african asian and latin american countries the bulk of the labor force still lives in the countryside in these countries the large difference between expected rural and urban or foreign incomes coupled with the risk reducing functions of migration causes workers to migrate either to urban centers or abroad the remittances defined as the money or goods sent home by migrant workers can have a large effect on the accumulation of assets in these rural areas for example an inflow of external remittances to rural households at the upper end of the income distribution could increase land accumulation by the rich in general terms the effect of remittances on asset accumulation in a rural third world economy depends on answers to three questions a who migrates b how much net income do migrants remit and c what are the marginal effects of these remittances on household consumption and investment because of data limitations in this article i propose to examine only the first and the third questions other researchers have addressed the second issue in the past surprisingly little attention has been focused on the question of the marginal effects of remittances on household consumption and investment in the rural third world this inattention has been due to three considerable methodological problems the first is fungibility because remittances are like any other form of cash income it is difficult to associate this income source with any particular changes in household expenditure behavior the second problem relates to the multiple round effects of remittances on the local economy for example an inflow of remittances into a rural area may lead to a surge in expenditures in housing which may in turn create new income and employment opportunities for the poor and unskilled unfortunately however few studies have

migrants and housing investments theory and evidence from nigeria the dominance of housing may reflect limitations in the menu of investment choices available to migrants in the country of origin in many developing countries individuals face relatively few savings opportunities where productive assets such as land farm assets are associated with high risks and or low rates of return housing investments offer unique advantages in that they are durable highly visible and associated with low risk and monitoring requirements however there are some important drawbacks associated with housing investments in particular where resale and rental markets for housing are not well developed migrants housing assets may be relatively illiquid and irreversible in the next section i provide some background on general patterns of investment behavior among migrants here the evidence on housing investments is discussed for a rich set of migrant sending and receiving countries in section iii i develop the conceptual framework for understanding migrants housing investment decisions section iv provides a description of the data sources section v outlines the empirical strategy in section vi i discuss the empirical findings section vii presents conclusions excerpt

remittances and household wealth after conflict a case study on urban burundi few studies have researched the use of remittances in conflict affected contexts this study analyzes unique data from burundi testing three hypotheses relative deprivation investment and insurance derived from new economics of labor migration studies employing propensity score matching results show that remittances are common among wealthier households rejecting the relative deprivation hypothesis remittances have strong effects on non productive assets such as living conditions and food security and weak effects on productive assets such as asset ownership poorer households invest mostly in non productive assets suggesting that remittances are insurance for the poor whereas wealthier households seem largely unaffected by remittances

poverty transition in rural vietnam the role of migration and remittances abstractthis study combines insights of the new economics of labour migration with the asset based approach to welfare dynamics using panel household data from vietnam this method allows us to determine whether poverty transitions induced by remittances are actually structural that is based on asset growth and therefore long term or stochastic that is based only on short term increases in income which implies a risk of falling back into poverty to control for endogeneity of remittances we use household fixed effects and instrumental variables estimation the paper shows that remittances have a positive impact on asset growth and that the impact differs with welfare status and ethnicity

does remittance fuel labour productivity in bangladesh the application of an asymmetric non linear ardl approach abstractbangladesh a labour abundant country is finally learning to reap gains from her labour abundance the historical under optimized capital labour ratio of bangladesh is slowly moving towards its optimum as the migration of its labour force and consequent inflow of remittance strategically converts its abundant labour into capital though the fear that remittance as an alternative source of earning may result in dutch disease for existing family members annual data for 1982 2013 and through applying standard testing methodologies our empirical findings suggest that such a fear is not valid since remittance flow significantly improves domestic labour productivity in bangladesh in the long run

migration and trade theoretical and empirical research in economics suggests that bilateral migration triggers bilateral trade through a number of channels this paper assesses the functional form of the impact of migration on trade flows in a quasi experimental setting we provide evidence that the relationship is not log linear in particular at small levels of immigration stocks the elasticity of trade to migration is quite high and it declines to zero at about 4 000 immigrants if immigration stocks exceed such a level the evidence suggests that trade will not increase anymore this suggests that for cross country network and other effects flowing from immigration to materialise at a significant level for trade a high enough level of immigrant stocks is necessary but there appears to be satiation as immigrant numbers increase

in search of substitution between foreign production and exports abstract are foreign production and exports substitutes or complements standard theory of the multinational corporation mnc assumes substitution while previous empirical work examining the relationship has generally found strong evidence of complementarity this study examines product level data which more closely fits the assumption of a single product firm often used in mnc theory and finds substantial evidence for both a substitution and a complementarity effect between affiliate production and exports with japanese automobile parts for the us market i also test for and find evidence of substitution using product level data on a set of japanese produced final consumer goods

immigration and trade creation econometric evidence from canada immigrants may expand trade with their country of origin owing to superior knowledge of or preferential access to market opportunities the authors test this proposition using canadian trade data with 136 partners from 1980 to 1992 in an augmented gravity equation they find that a 10 percent increase in immigrants is associated with a 1 percent increase in canadian exports to the immigrant s home country and a 3 percent increase in imports they also find that among the primary categories of immigrants independents have the greater influence on trade immigration via the entrepreneur class appears to have less impact on trade than all other classes except refugees

saving and economic shocks in rural pakistan abstract this paper adapts the recent methodology of paxson to study saving rates in rural pakistan particular attention is paid to differences in marginal rates of financial and physical saving and how these vary across income groups and by direction of income shocks households exhibit more difficulty in smoothing consumption after successive shocks than with a single shock the study also observes marginal rates of saving out of international remittances and lump sum pensions unlike domestic remittances international remittances appear to be treated much as transitory income shocks

the real exchange rate the capital stock and fiscal policy abstract this paper studies the joint determination of aggregate supply the real exchange rate and the current account in response to changes in government spending in a model where there is no uncertainty in the aggregate but where individuals are uncertain about their lives duration international capital mobility fixes the steady state capital stock and aggregate supply in a small country whereas in a large country the steady state capital stock is endogenous an increase in government spending is more likely to generate a real exchange rate depreciation in a small country since the loss of wealth associated with cumulated current account deficits does not increase rest of the world spending in the case of a large country current account deficits are wealth transfers to the rest of the world and increase foreign spending thus the normal long run response is an increase in the relative price of domestic output

immigrant links to the home country empirical implications for u s bilateral trade flows immigrants ties to their home countries can play a key role in fostering bilateral trade linkages immigrant ties include knowledge of home country markets language preferences and business contacts that have the potential to decrease trading transaction costs empirical results for the united states suggest that immigrant links have historically been important in increasing bilateral trade flows with immigrants home countries copyright 1994 by mit press

trade diaspora and migration to new zealand this paper examines the hypotheses that a greater stock of migrants in new zealand from a particular country leads to more trade between that country and new zealand and a greater stock of new zealanders living overseas in a particular country leads to more trade between that country and new zealand it also examines the relationships between migration diaspora and tourism exports the literature suggests that migrants can stimulate trade by lowering transaction costs and by bringing with them preferences for goods produced in their home country our approach is to apply panel data techniques within the framework of a standard gravity model of trade to a dataset consisting of information on 233 countries in each of the 26 years between 1981 and 2006 we estimate a random effects panel sample selection model using correlated random effects our results indicate that migration does indeed stimulate trade in our benchmark specification merchandise exports from and imports to new zealand both have a statistically significant relationship with numbers of migrants in new zealand imports also have a statistically significant relationship with numbers of new zealanders overseas our results also suggest that migration stimulates imports more than exports

remittances and vulnerability in developing countries this paper examines how international remittances are affected by structural characteristics macroeconomic conditions and adverse shocks in recipient economies we exploit a novel rich panel data set covering bilateral remittances from 103 italian provinces to seventy nine developing countries over the period 2005 2011 we find that remittances are negatively correlated with the business cycle in recipient countries and in particular increase in response to adverse exogenous shocks such as large terms of trade declines this effect is stronger where the migrant communities have a larger share of newly arrived migrants finally we show that recipient country financial development is negatively associated with remittances suggesting that remittances help alleviate credit constraints

network effects and the dynamics of migration and inequality theory and evidence from mexico international migration is costly and initially only the middle class of the wealth distribution may have both the means and incentives to migrate which can increase inequality in the sending community however the migration networks formed lower the costs for future migrants which can in turn lower inequality this paper shows both theoretically and empirically that wealth has a nonlinear effect on migration and then examines the empirical evidence for an inverse u shaped relationship between emigration and inequality in rural sending communities in mexico after instrumenting we find that the overall impact of migration is to reduce inequality across communities with relatively high levels of past migration we also find some suggestive evidence for an inverse u shaped relationship among communities with a wider range of migration experiences

migration networks and microenterprises in mexico are migration networks associated with lower capital costs or the alleviation of capital constraints we examine these questions with data measuring access to remittance flows among small scale entrepreneurs in mexico using a survey of more than 6000 self employed workers and small firm owners located in 44 urban areas of mexico we estimate the impact of attachment to migration networks on the level of capital investment the capital output ratio sales and profits of microenterprises the impact is identified from the geographic pattern of migration from mexico driven by the completion of rail lines in the early 1900s for the full sample of firms we find that migration is associated with higher investment levels and higher profits but not higher sales the strongest effects on investment are in the categories of automobiles tools and inventories when the sample is limited to firms in high capital sectors investment sales and profits all increase with attachment to the migration networks suggesting that attachment to the migration network alleviates capital constraints in those sectors

remittances and financial access is there really a link and for whom evidence from mexican household data in policy discussions it has frequently been claimed that migrants remittances could function as a catalyst for financial access among receiving households this paper provides empirical evidence on this hypothesis from mexico a major receiver of remittances worldwide using the mexican family life survey panel mxfls for 2002 and 2005 the results from the fixed effects logit model show that receiving remittances is strongly correlated with the ownership of savings accounts and to a limited degree with the availability of borrowing options effects are particularly important for microfinance institutions and more important for rural households compared to urban households

the roles of destination gender and household composition in explaining remittances an analysis for the dominican sierra two non exclusive hypotheses about what motivates remittances sent by dominican migrants to their rural parents in the sierra are tested a an insurance contract taken by parents with their migrant children and b an investment by migrants in potential bequests results show that the relative importance of these two motives to remit is affected by destination us vs cities in the dominican republic gender and household composition the insurance function is mainly fulfilled by female migrants to the us only when a male is the sole migrant in his household does he play the role of insurer investment by contrast is pursued by both males and females but only among those migrating to the us d 2002 elsevier science b v all rights reserved

undocumented mexico u s migration and the returns to households in rural mexico this paper presents estimates of net income gains to a sample of households in rural mexico from sending migrants illegally to the united states correcting for sample selectivity bias and it examines the role of expected income gains in driving illegal mexico u s migration there is no evidence that people who migrate illegally to the united states are above average contributors to household income either as workers in mexico or as mexico u s migrants however other things being equal villagers who are in the best position to contribute to household income as workers in mexico are positively selected not to migrate to the united states

the effects of international migration on migrant source households evidence from ethiopian diversity visa lottery migrants about a million people have migrated to the us via the diversity visa dv lottery the dv was instituted by an act of the united states congress to diversify the u s population through a lottery made available to people from countries with historically low rates of immigration to the country in any given year the probability of winning the lottery is less than 1 with millions of people from around the world competing for a maximum of 55 000 immigrant visas that can be obtained through this migration channel using ethiopian dv participants which have consistently made up between 6 and 8 of all dv immigrants i study the causal effects of emigration on the well being of the migrant sending families i infer that migration contributes positively to the welfare of the source families overall migration increases consumer expenditure but has no effect on savings and business ownership of the senders the positive treatment effects do not diminish with duration of emigration migrant men contribute more to the increase in their families standard of living than their female counterparts do while expenditure on food and energy are invariant to the migrants gender the gains in terms of durable ownership access to clean water and sanitation facilities occur almost entirely in families where the emigrants are men i find that dv participants are favorably selected relative to the overall population

the trade creating effects of business and social networks evidence from france using theory grounded estimations of trade flow equations this paper investigates the role that business and social networks play in shaping trade between french regions the bilateral intensity of networks is quantified using the financial structure and location of french firms and bilateral stocks of migrants compared to a situation without networks migrants are shown to double bilateral trade flows while networks of firms multiply trade flows by as much as four in some specifications finally taking network effects into account divides the estimation of the impact of transport costs and of the effect of administrative borders by around three

impacts of migration and remittances on ethnic income inequality in rural china summary migration is often viewed as the best option for poor rural households to exit out of poverty although the distributional effects of migrants remittances tend to be ambiguous in the literature given that increasing income inequality is a major concern and policy issue this paper examines the impacts of migration and migrants remittances on income inequality in china s rural minority areas using recent proprietary household data treating migrants remittances as a potential substitute for income the results reveal that migration significantly boosts income for all ethnic groups although the returns to ethnic minority households tend to be less than for han households decomposition analyses further reveal that migration increases inequality between ethnic groups despite reducing spatial inequality these countervailing effects imply that the continual transfer of rural urban migrants will likely lead to spatial convergence despite reinforcing ethnic inequalities in rural minority areas importantly the percentage contribution of ethnic inequality to total inequality is larger than that of spatial inequality across sampled rural locations thus highlighting the fact that the ethnic dimension is an important yet often overlooked component of inequality in china

ethnic networks and trade intensive versus extensive margins abstract ethnic networks have been associated with increased international trade although studies have not differentiated between entry into foreign markets and trade expansion we find that ethnic networks increase trade on the intensive margin but not on the extensive margin

are remittances an effective mechanism for development evidence from tajikistan 1999 2007 abstract in many remittance receiving countries evidence linking remittances to household economic stability and investment is limited using three cross sectional national surveys 1999 2003 2007 we compare remittance receiving to non remittance households in tajikistan a country highly dependent on remittances exploring household perceptions of financial security wealth and entrepreneurial activity across a period of rising remittance reliance we find that households receiving remittances are not more economically stabile wealthier or entrepreneurial than non remittance households findings highlight the importance of conceptualising remittances as a process influenced by the developmental contexts within receiving countries and question previous assumptions concerning development pathways

international migration remittances and schooling evidence from el salvador abstract we examine the effect of remittances from abroad on households schooling decisions using data for el salvador following the massive war related emigration of the 1980s remittances became a significant source of household income throughout the 1990s we use the cox proportional hazard model to examine the determinants of school attendance measuring income from a source that is uncorrelated with parental schooling remittances we find that remittances have a large significant effect on school retention we estimate that while household income net of remittances has a small though significant impact on the hazard of leaving school in rural and urban areas remittances have a much larger impact on the hazard of leaving school in urban areas the effect of remittances is at its smallest 10 times the size of the effect of other income in rural areas the effect of remittances is about 2 6 times that of other income our finding is of interest in that it suggests that subsidizing school attendance particularly in poor areas may have a large impact on school attendance and retention even if parents have low levels of schooling

remittances and the use of formal and informal financial services summary while recent literature has pointed to a positive effect of migrants remittances on the financial development of receiving countries findings with respect to access to and the use of loans have been ambiguous this paper investigates the effect of remittances on the use of formal and informal financial services using mexican household data and finds positive and statistically significant effects of remittances on the ownership of savings accounts the existence of debts and on recent borrowing the fact that the effect of remittances on borrowing is driven by informal finance rather than by traditional bank loans points to deficiencies of the formal financial sector in addressing the financial needs of remittance receiving households we address methodological concerns of selection bias and reverse causality through household fixed effects and an instrumental strategy that exploits distance to train lines and labor market conditions in the us as exogenous determinants of remittances

remittances and portfolio values an inquiry using immigrants from africa europe and the americas summary using a recent spanish database we show that remittances respond to cross country differences in portfolio values behavior consistent with immigrant s access to trans national networks responsiveness to portfolio variables is found to persist regardless of education level there are however differences in the portfolio variables to which immigrants respond as we would expect given migrants diverse backgrounds region of origin and motive for emigrating remitting patterns are found to change with the length of migration spells suggestive that remittances sent for portfolio motives become more likely as the immediate needs of home family are addressed and asset accumulation becomes more important

using weather variability to estimate the response of savings to transitory income in thailand this paper measures the extent to which farmers are able to use savings and dissavings to smooth consumption in response to unexpected shocks to income time series information on regional rainfall is used to construct estimates of transitory income due to rainfall shocks the relationship between these measures of transitory income and savings indicates that farm households save a significantly higher fraction of transitory income than nontransitory income jel d91 016 the incomes of farm households in developing countries are notorious for being both low and uncertain policies that increase the incomes of farmers may well be different

the impact of international remittances on child outcomes and household expenditures in nepal abstractnepal has one of the highest ratios of international remittances to gross domestic product in the world we examine whether the massive inflow of international remittances affects child schooling child labour and household expenses controlling extensively for a host of observed characteristics of households and migrants and using an instrumental variable approach this research finds no effect of international remittances on child education or child labour in nepal however it does find a significant increase in non food expenditures including education spending due to international remittances despite increased expenditure on child education educational outcomes are not improving because of international remittances

don t tell on me experimental evidence of asymmetric information in transnational households although most theoretical models of household decision making assume perfect information empirical studies suggest that information asymmetries can have large impacts on resource allocation i demonstrate the importance of these asymmetries in transnational households where physical distance between family members can make information barriers especially acute i implement an experiment among migrants in washington dc and their families in el salvador that examines how information asymmetries can have strategic and inadvertent impacts on remittance decisions migrants make an incentivized decision over how much of a cash windfall to remit and recipients decide how they will spend a remittance migrants strategically send home less when their choice is not revealed to recipients recipients make spending choices closer to migrants preferences when the migrants preferences are shared regardless of whether or not the spending choices are revealed to the migrants suggesting that recipients choices are inadvertently affected by imperfect information

the effects of international remittances on poverty and inequality in ethiopia abstractthe article studies the effects of international remittances on poverty and inequality in ethiopia using an urban household survey from 2004 counterfactual consumption in the hypothetical case of no remittance is estimated in a selection corrected estimation framework inequality and poverty values in the hypothetical and actual cases are then compared there is a significant reduction in poverty while inequality does not change the head count the poverty gap and the squared poverty gap ratios decreased from 0 41 to 0 38 0 14 to 0 13 and 0 064 to 0 057 respectively

an ex ante model for estimating the impact on trade flows of a country s accession to a customs union this paper presents a structural ex ante model to study the trade creation and trade diversion effects associated with a country s accession to a customs union the model extends previous studies by introducing explicitly product differentiation and exports in the determination of trade creation and trade diversion unlike the traditional vinerian analysis where the role of exports is neglected the model handles the effects of the elimination of the common external tariff facing home exports the model is then applied to portugal s accession to the european community and estimates of trade substitution elasticities are presented for 26 sectors finally these elasticities are used along with other parameter estimates to classify sectors according to whether they would give rise to trade creation or trade diversion

international migration and nutritional outcomes in tajikistan abstract tajikistan is the country with the largest share of remittances to gdp in the world at the same time it suffers from stubbornly high levels of child malnutrition against which only very slow progress has been made this paper investigates the relationship between international migration and child malnutrition using data from a recent nationally representative household survey there are theoretical reasons to expect that migration may be exerting both positive and negative effects on nutrition and food security so that understanding what the net effect may be is essentially an empirical question our results indicate that migration appears to be playing a positive role in enhancing child growth patterns as measured by height for age z scores in the country we explore some of the possible channels through which this effect might be operating and find that one such channel is by increasing households kilocalorie consumption

migrant remittances and physical investment purchases evidence from kenyan households this paper investigates the impact of remittances on household decisions to purchase physical investments in kenya using household survey data an instrumental variables approach is employed using rainfall variation and mobile network coverage as instruments to control for the endogeneity of remittances the empirical evidence obtained is suggestive of remittances having a positive and significant effect on the decisions by households to purchase physical investments

the effects of external migration on enrolments accumulated schooling and dropouts in punjab external migration in developing countries can relax household income constraints because of external remittances this paper looks at whether the external migration of individuals in a household has a positive effect on schooling outcomes of children as measured by school enrolments accumulated level of schooling number of days spent in school and dropouts in punjab historic migration rates were used to instrument for migration in an analysis of school outcomes for children of different ages to see which group has been most affected by external migration the results show a significantly positive impact of external migration on the enrolments of younger children whereas the accumulated level of schooling for older children increases significantly if there is an external migrant in the household

are remittances a substitute for credit carrying the financial burden of health shocks in national and transnational households summary this paper tests for the assumption that remittances are a substitute for credit by comparing the response to health related shocks among national and transnational households using mexican household panel data while the occurrence of serious health shocks that required hospital treatment doubled the average debt burden of exposed households compared to the control group households with nuclear family members a parent child or spouse in the us did not increase their debts due to health shocks this finding is consistent with the view that remittances respond to households demand for financing emergencies and make them less reliant on debt financing

does multinational activity displace trade kimberly a clausing using two panel data sets on the operations of u s multinational firms abroad and the operations of foreign multinational firms in the united states this article examines the empirical relationship between international trade and multinational activity the evidence supports the conclusion that multinational activity and trade are complementary activities particularly multinational activity and intrafirm trade this empirical result is consistent with the theoretical reasons one might expect a complementary relationship between the two activities and is also robust to different approaches and specifications jel f23 i introduction in recent years foreign direct investment fdi has become an increasingly important part of world integration flows of fdi have been increasing faster than trade flows which in turn have been growing faster than income 1 in addition multinational firms play a very large role in world trade for the united states 83 of exports in 1994 were either intrafirm shipments between multinational parents and their affiliates 36 or arms length trade between multinationals and unaffiliated buyers 47 2 although it is clear that multinational firms have an important role in world trade it is certainly less clear what the relationship is between production abroad and trade for multinational firms the popular press often assumes that multinational investment by u s firms replaces u s exports and in fact some economists have assumed that the rapid growth of foreign direct investment in recent years implies that multinational activity will eventually displace trade 3 this article examines the empirical relationship between multinational activity and trade and finds that there is evidence that multinational activity complements rather than displaces trade the article utilizes two panel data sets constructed from aggregate survey data published by the bureau of economic analysis bea the data vary by country and over time the first data set is used to study the relationship between u s exports and the activities of u s affiliates abroad this data set is constructed from data describing the operations of u s multinational firms in 29 host countries between 1977 and 1994 together with data on u s exports both intrafirm and arms length the second data set is used to study the relationship between u s imports and the activities of foreign affiliates operating in the united states it uses data describing operations in the united states by foreign affiliates of firms based in 29 home countries between 1977 and 1994 together with data on u s imports both intrafi rm and arms length most previous studies of this question have examined the relationship between multinational activity and trade for a cross section of countries by using data that also vary over time it is possible to explore more thoroughly the relationship between multinational activity and trade and how this relationship evolves it is also possible to control for fixed country effects that may be influencing the observed relationships previous studies have tended to focus on the relationship between outward multinational activity and exports this article looks as well at the relationship between inward multinational activity and imports finally this article considers the question of complementarity between multinational activity and trade in two ways in addition to looking at the relationship between the quantities of multinational activity and trade the article also studies complementarity much as one might think of complementarity in a demand study by considering cross price effects in particular the article includes an analysis of the relationship between price variables that measure the cost of multinational activity abroad and exports since the price of operating abroad is negatively related to exports this is further evidence of a complementary relationship between trade and multinational activity

networks in the modern economy mexican migrants in the u s labor market this paper attempts to identify job networks among mexican migrants in the u s labor market the empirical analysis uses data on migration patterns and labor market outcomes based on a sample of individuals belonging to multiple origin communities in mexico over a long period of time each community s network is measured by the proportion of the sampled individuals who are located at the destination the united states in any year we verify that the same individual is more likely to be employed and to hold a higher paying nonagricultural job when his network is exogenously larger by including individual fixed effects in the employment and occupation regressions and by using rainfall in the origin community as an instrument for the size of the network at the destination

do remittances diminish social violence abstractthis paper represents the first attempt to formalise the relationship between remittances and social violence by developing a model that predicts that migrants remittances lead to the reduction of social violence in the recipient economy under the condition that remittances increase the average product of labour using homicide data as an indicator of social violence we tested our model s prediction controlling for the endogeneity problem with appropriate instruments we found that remittances tend to reduce social violence we performed sensitivity analysis on remittances in the empirical specification and found it robust with an unchanged negative sign

international migration self selection and the distribution of wages evidence from mexico and the united states we use the 1990 and 2000 mexican and u s population censuses to test borjas s negative selection hypothesis that the less skilled are those most likely to migrate from countries with high skill premia earnings inequality to countries with low skill premia earnings inequality we find that mexican immigrants in the united states are more educated than nonmigrants in mexico and were mexican immigrants to be paid according to current skill prices in mexico they would be concentrated in the middle of mexico s wage distribution these results are inconsistent with the negative selection hypothesis and instead suggest that there is intermediate selection of immigrants from mexico

remittances household expenditure and investment in guatemala the author uses a large household data set from guatemala to analyze how the receipt of internal remittances from guatemala and international remittances from the united states affects the marginal spending behavior of households on various consumption and investment goods contrary to other studies the author finds that households receiving remittances actually spend less at the margin on consumption food and consumer goods and durables than do households receiving no remittances instead of spending on consumption households receiving remittances tend to spend more on investment goods like education health and housing the analysis shows that a large amount of remittance money goes into education at the margin households receiving internal and international remittances spend 45 and 58 percent more respectively on education than do households with no remittances these increased expenditures on education represent investment in human capital like other studies the author finds that remittance receiving households spend more at the margin on housing these increased expenditures on housing represent a type of investment for the migrant as well as a means for boosting local economic development by creating new income and employment opportunities for skilled and unskilled workers

remittances and working poverty abstractthis article shows that the level and the predictability of remittances reduce working poverty in receiving economies through their effects on labour market dynamics it takes advantage of the new cross country dataset ilo kilm 7th edition containing information on the share of individuals working for less than us 2 per day to identify the main impacts the article proposes a novel approach to deal with the endogeneity of remittances and migration in addition the results are robust to the possible error in measuring working poverty to the potential attrition bias and to the presence of various control variables