Christian Dustmann

The Optimal Migration Duration and Activity Choice after Re-Migration

If migrants return to their origin countries, two questions arise which are of immediate economic interest for both immigration and emigration country: What determines their optimal migration duration, and what are the activities migrants choose after a return. Little research has been devoted to these two issues. This paper utilises a unique survey data set which records activities of returned migrants. We first illustrate the activities of immigrants after returning. We show that more than half of the returning migrants are economically active after return, and most of them engage in entrepreneurial activities. We then develop a model, where migrants decide simultaneously about the optimal migration duration, and their after-return activities. Guided by this model, we specify and estimate an empirical model, where the after-return activity, and the optimal migration duration are simultaneously chosen.

Return Migration: Theory and Empirical Evidence from the UK

In this article, we discuss forms of migration that are non-permanent. We focus on temporary migrations where the decision to return is taken by the immigrant. These migrations are likely to be frequent, and we provide some evidence for the UK. We then develop a simple model that rationalizes the decision of a migrant to return to his/her home country, despite a persistently higher wage in the host country. We consider three motives for a temporary migration: (i) differences in relative prices between host and home country, (ii) complementarities between consumption and the location where consumption takes place, and (iii) the possibility of accumulating human capital abroad, which enhances the immigrants earnings potential back home. For the last return motive, we discuss extensions that allow for immigrant heterogeneity, and develop implications for selective in- and out-migration.

Return Migration, Wage Differentials, and the Optimal Migration Duration

In simple static models, migration increases with the wage differential between host- and home-country. In a dynamic framework, and if migrations are temporary, the size of the migrant population in the host country depends also on the migration duration. This paper analyses optimal migration durations in a model which rationalises the decision of the migrant to return to his home country, despite persistently higher wages in the host country. The analysis shows that, if migrations are temporary, the optimal migration duration may decrease if the wage differential grows larger. Using micro data for Germany, the second part of the paper provides empirical evidence which is compatible with this hypothesis.

The Impact of Immigration on the British Labour Market

Using data from the British Labour Force Survey this article provides an empirical investigation of the way immigration affects labour market outcomes of native born workers in Britain, set beside a theoretical discussion of the underlying economic mechanisms. We discuss problems arising in empirical estimation, and how to address them. We show that the overall skill distribution of immigrants is remarkably similar to that of the native born workforce. We find no strong evidence that immigration has overall effects on aggregate employment, participation, unemployment and wages but some differences according to education.

Speaking Fluency, Writing Fluency and Earnings of Migrants

This paper analyzes the determinants of language abilities of migrant workers and the impact of language proficiency on their earnings position. The analysis is based on data for West Germany. The first part presents an ordered probit analysis of the determinants of German speaking and writing fluency for both male and female migrants. The data allow not only to consider personal characteristics of the migrant as explanatory variables, but to analyze additionally the effect of the family context and of illiteracy on the migrants German language fluency. In the second part, the effect of language on the migrants earnings position is analyzed. It is shown that language abilities, and especially writing proficiency, considerably improve the earnings position of migrants.

The Economic Situation of First and Second‐Generation Immigrants in France, Germany and the United Kingdom*

A central concern about immigration is the integration into the labour market, not only of the first generation but also of subsequent generations. Little comparative work exists for Europes largest economies. France, Germany and the UK have all become, perhaps unwittingly, countries with large immigrant populations albeit with very different ethnic compositions. Today, the descendants of these immigrants live and work in their parents’ destination countries. This article presents and discusses comparative evidence on the performance of first and second-generation immigrants in these countries in terms of education, earnings and employment.

Return migration: the European experience

Labour immigration contributed strongly to Europes post-war economic development. In contrast to migration to North America or Australia, these movements of labour were always seen as temporary by sending and receiving countries, and, at least initially, also by most migrants. Although many migrants stayed more permanently, return migration is a highly relevant feature in practice. Its significant role and the underlying behavioural mechanisms are not well understood, however. It is therefore not too surprising that most policy measures taken in the 1970s and 1980s to encourage return migration failed. The paper takes the view that much can be learned from recent European history. Temporary immigration schemes may be helpful to moderate illegal migration and to foster East--West economic relationships. Given the tight policies in the European Union, short-term migration seems to be the only channel to open the door slightly. The paper reviews the European history of return migration and the policy regimes in important European labour migration-receiving countries. It also provides new empirical evidence on the determinants of return behaviour and successful return. Return propensities of migrants increase with the age at entry, but decrease with the number of years of residence. Conditional on having decided to return, however, the remaining years in the country decrease with years of residence and, keeping years of residence constant, with entry age. Return incentives may cause dissatisfaction and reintegration problems in the home country. The results support the view that economic benefits are the larger, the earlier it is clear whether migration is temporary or permanent.

ATTITUDES TO ETHNIC MINORITIES, ETHNIC CONTEXT AND LOCATION DECISIONS*

The attitudes of ethnic majority populations towards other communities is a potentially important determinant of social exclusion and of the welfare of ethnic minorities. The suggestion that negative attitudes towards minorities may be affected by the ethnic composition of the locality in which individuals live has often been made and empirically investigated. We point to an important potential for bias in simple estimates of ethnic context effects if individual location decisions are driven in part by attitudinal factors. We also suggest an instrumental variables procedure for overcoming such bias in data with appropriate spatial information. Our results suggest that allowing for such effects is of considerable importance.

Language fluency and earnings : Estimation with misclassified language indicators

We use panel data to analyze the determinants of speaking fluency and wages of immigrants. Our model takes account of two problems that may bias OLS estimates of the impact of speaking fluency on earnings. First, subjective variables on an ordinal discrete scale, such as self-reported language ability, can suffer from misclassification errors. The model decomposes misclassification errors into a time-persistent and a time-varying component. Second, the model accounts for correlated unobserved heterogeneity in language and earnings equation. The main finding is that these two generalizations of the standard model both lead to substantial changes in the estimated effect of speaking fluency on earnings.

The Fiscal Effects of Immigration to the UK

In this paper, we investigate the fiscal impact of immigration on the UK economy, with a focus on the period since 1995. We provide estimates for the overall immigrant population for the period between 1995 and 2012, and for more recent immigrants who arrived since 2000, distinguishing between immigrants from European versus non-European countries. Overall, our findings indicate that EEA immigrants have made a positive fiscal contribution, even during periods when the UK was running budget deficits. This positive contribution is particularly noticeable for more recent immigrants that arrived since 2000 in particular from EEA countries.