THREE ESSAYS ON POPULATION DYNAMICS, TRADE AND GROWTH

OF DISSERTATION THREE ESSAYS ON POPULATION DYNAMICS, TRADE AND GROWTH Changes in immigration patterns and differential fertility choices shape the economies of both developed and developing countries. However, these changes affect the economies of developed and developing nations in different ways. This study aims to understand the changes in population dynamics, brought about by differences in cross–country differential fertility choices and migration patterns, and how these changes affect economic development via the channels of international trade and cross–country human capital accumulation. Chapter 1 discusses the background, data and literature on the patterns and composition of immigration and international trade, which are further explored in Chapter 2 for the world sample and in Chapter 3 for the U.S. and its trade partners. Chapter 2 employs data on refugee and immigrant stocks for the years 1990–2005, and compares the extent to which refugees and immigrants differentially affect trade (exports and imports) with their home countries. The main contributions of Chapter 2 are: the high–dimensional fixed effect estimation of the immigrants’ and refugees’ effect on trade—a technique not previously applied within the immigration and trade literature; differentiation between the effect of immigrants and refugees on trade in commodity and differentiated product types for the world sample; and, finally, expanding the sample size beyond the countries and years considered in the previous studies. Chapter 2 provides the first evidence of the differential refugee–immigrant trade effect for the world sample, using the high–dimensional fixed effect estimation, which controls for unobserved events correlated with both trade and migration decisions over time. I find that immigrants have a small positive (1.27%) effect on differentiated exports to their home country, while refugees do not affect trade. I find no evidence of immigrants or refugees affecting imports. These findings are different from the previous research, which relied on using the augmented gravity approach and estimated the effect of immigrants on trade to be anywhere between 4–6 percent on exports and 5–7 percent on imports, respectively. Controlling for time–varying multilateral resistance terms is one of the main contributions of the paper, as it allows for a better estimation of the effect of immigration on trade, and, contrary to previous research, finds little evidence of immigrants’ and refugees’ effect on trade with their home countries. Chapter 3 analyzes the effect of immigrants and refugees on U.S. trade with their home countries. More specifically, it explores the relationship between U.S. exports to 125 and imports from 100 immigrant and refugee countries of origin for the years 1990– 2005. I find that immigrants have a positive effect on differentiated exports (0.3%) and have a negative effect on imports (affecting imports in differentiated products more). I do to find an effect of refugees on either U.S. exports or imports from their home countries. Finally, Chapter 4 explores the cross–country differences in educational attainments, taking differential fertility rates into account. Differential fertility rate is the difference between fertility rates of women with high educational attainment and women with low educational attainment. In a country where differential fertility is high, lower–educated women have more children than highly educated women but, due to the highly persistent intergenerational transmission of human capital, the many children born to lower–educated women also tend to have less education, decreasing the future aggregate educational attainment and, potentially, reducing growth. In contrast, in a country with initially lower differential fertility, the children of less educated women still receive less education (compared to the children of highly educated women), but since they do not represent a large enough fraction of the population, the decrease in the future aggregate level of human capital is not as stark. We document that and increase in differential fertility has a positive effect on future primary enrollment ratios, and is negatively correlated to the total average years of schooling.