Carlo Devillanova

Social security and migration with endogenous skill upgrading

Abstract The aim of the paper is to investigate the joint redistributive effects of migration and pensions and to reassess the sustainability issue raised in the existing economic literature. The paper first develops a theoretical framework to analyse the impact of international migration on the labour market. The model allows for heterogeneity across native-born individuals and for migrants to affect both the wages and the education decision in the recipient country. It then explicitly focuses on pensions under alternative migration scenarios. The analysis shows that migration causes redistributive effects which increase across-group wage inequality. However, the endogenous educational response by residents partially offsets the redistributive impact of migration while creating additional interest groups. Migration helps the financial sustainability of the pension scheme but the interaction between migration and pensions causes complex inter- and intragenerational redistributive conflicts, which are analysed in the paper.

Over-education and spatial flexibility: New evidence from Italian survey data

This paper studies the relationship between internal mobility and overeducation. Using a large survey on the Italian labour market, it estimates the effect of workers’ spatial flexibility (precise information on commuting and migration) on their probability of being overeducated. The analysis tries to deal with two possible causes of misspecification, which can bias the correlation between migration and overeducation downward: the endogeneity of migration and the omission of relevant job characteristics. This adds to the received literature. It also deals with selection into employment and controls for area and personal characteristics, including several proxies for individual’s ability. Results show that commuting is positively correlated with the quality of the education-job match. On the contrary, the conventional wisdom that internal migration unambiguously reduces the incidence of overeducation does not receive empirical support. The negative correlation between migration and overeducation vanishes once job characteristics are included in the analysis and becomes positive when migration is instrumented. These findings can be easily rationalized by incorporating some of the suggestions of the literature on international migration into the standard framework used in spatiallybased explanations for overeducation. From a policy perspective, it seems fair to conclude that the link between internal migration and overeducation remains unclear and that further research is needed in order to better ground policy prescriptions.

International Migration, Human Capital Formation, and the Setting of Migration-Control Policies: Mapping the Gains

Recent research has identified conditions under which migration of human capital (skilled workers) from a developing (sending) country to a developed (receiving) country enhances human capital formation and improves wellbeing within the sending country (Mountford, 1997; Stark, Helmenstein, and Prskawetz, 1997, 1998; Stark and Wang, 2002; Fan and Stark, 2007; Stark and Fan, 2007, 2008). In contrast to earlier writings on the brain drain (for example, Patinkin, 1968; Bhagwati and Wilson, 1989), the recent contributions cast migration as a harbinger of human capital gain rather than a cause of human capital drain.

Employment of Undocumented Immigrants and the Prospect of Legal Status: Evidence from an Amnesty Program

This article estimates the causal effect of the prospect of legal status on the employment outcomes of undocumented immigrants. The identification strategy exploits a natural experiment provided by an Italian amnesty program that introduced an exogenous discontinuity in eligibility based on date of arrival. The authors find that immigrants who are potentially eligible for legal status under the amnesty program have a significantly higher probability of being employed relative to undocumented immigrants who are not eligible. The size of the estimated effect is equivalent to about half the increase in employment that undocumented immigrants in our sample normally experience during their first year in Italy. These findings are robust to several checks and falsification exercises.

Regional Insurance and Migration

A dynamic model of migration is developed to study whether labor mobility can hedge people against region-specific shocks, making private or public insurance redundant. The model adopts a novel timing for migration, which is argued to be the time frame suitable for analyzing risk-sharing issues. It also innovates on the existing literature by solving individual migration through convexification of the set of actions. The results show that the role of migration as an insurance mechanism is small: labor mobility cannot fully remove income differentials between regions. It is also shown that a fiscal stabilization scheme is, in general, optimal; moreover, any pure risk-sharing mechanism has no influence on migration flows.

Inequities in immigrants’ access to health care services: disentangling potential barriers

Purpose The purpose of this paper is to empirically assess whether immigrants suffer from unequal access to health care services, that add to prevailing socioeconomic barriers to care. Design/methodology/approach Using a uniquely rich Italian health survey, the authors estimate the correlation between immigrant status and the probability of accessing health services, conditional on a rich set of individual and territorial characteristics. Findings Results show that foreigners are more likely to contact emergency services and less likely to visit specialist doctors and use preventive care. Similar results hold for second-generation immigrants. Originality/value The authors discuss the sources of observed inequities and suggest tentative policy implications to promote equal access.

Labour Mobility, Capital-Skill Complementarity and the Redistributive Effects of Trade Integration

This paper addresses the role of mobility costs in shaping the effects of trade integration on wage inequality and welfare. We present a three-factor, two-sector model in which the production technology exhibits capital-skill complementarity and the cost of moving across sectors differs between unskilled and skilled workers. We consider a proportional tax on skilled workers’ wage that is used to finance a re-training program to reduce the mobility costs of unskilled workers. We show that if the training program is sufficiently effective, a positive tax rate can both reduce wage inequalities and reinforce the welfare-enhancing effects of trade integration. In addition we show that, even when the public programme entails some welfare losses, it can make trade integration Pareto superior with respect to autarky.

Social Security and Migration with Endogenous Skill Composition

The paper investigates the impact of international migration on public pay-as-you-go pension systems. It first develops a theoretical framework to analyse the effects of migration on the labour market. The model allows for heterogeneity across individuals and for migration to affect both the wages and the educational choice in the recipient country. It then explicitly focuses on social security, under alternative migration scenarios. The analysis shows that migration helps the financial sustainability of the social security scheme, by reducing the elderly dependency ratio. However, it also highlights the complex inter and intragenerational redistributive conflicts caused by the interaction between migration and pension schemes. Migration influences the preferences of residents on social security: it is shown that migration polarises the preferences over the social security scheme and it can undermine the support to it. Social security affects the attitudes of residents towards migration: namely, it decreases the opposition to migration, by working as an insurance device for the unskilled workers.