Isabel Ruiz

The Economics of Forced Migration

Abstract This article reviews the economics literature on the impacts of forced migration. The literature is divided into two parts: impacts on forced migrants and impacts on host communities. Studies exploring the impact of forced migration due to WWII suggest that the long-term impact is often positive. The literature for developing countries suggests that there are serious consequences of forced migration for those forced to migrate. These consequences range from worse labour market outcomes to less consumption smoothing. The impact on host communities seems to be mixed and there are winners and losers. The article provides suggestions for future research.

The Impact of FDI on CO2 Emissions in Latin America

This paper uses panel Granger causality tests to study the relationship between sector-specific foreign direct investment (FDI) and CO2 emissions. Using a sample of 18 Latin American countries for the period 1980–2007, we find causality running from FDI in pollution-intensive industries (“the dirty sector”) to CO2 emissions per capita. This result is robust to controlling for other factors associated with CO2 emissions and using the ratio of CO2 emissions to GDP. For other sectors, we find no robust evidence that FDI causes CO2 emissions.

Monetary Policy and International Remittances

This article studies the response of Mexico’s monetary policy to inflows of workers’ remittances. Previous studies have shown that remittances can have an impact on several macroeconomic variables of the receiving country (e.g. exchange rate, inflation and output, among others). Mexico has the largest inflow of remittances in Latin America and the second largest inflow in the world. As such, it may be the case that the monetary authority in Mexico is taking these flows into account when selecting their monetary policy stance. Overall, the results of this study indicate that remittance shocks do not have a large impact on Mexico’s monetary policy variables. This seems to suggest that Mexico’s Central Bank main concern is inflation and that the potential appreciation of the Mexican currency as a result of increased remittance inflows might not be a priority.

Political Risk, Macroeconomic Uncertainty, and the Patterns of Foreign Direct Investment

While recent times have witnessed a surge of foreign direct investment (FDI) inflows into the developing world, these inflows remain below optimal levels. In this article, we use data on African, Asian, and Latin American economies to investigate the role of political risk and macroeconomic uncertainty—stemming from the foreign exchange market—as determinants of the patterns of FDI. Moreover, given the low share of FDI going into African economies, we place special attention on the differential impact of these variables on FDI flows into Africa. The results of this study point to the fact that, in general, political risk and exchange rate uncertainty reduce FDI. However, it is shown that the impact of political risk is more severe for FDI flowing into African economies.

Remittances, Institutions and Growth: A Semiparametric Study

In this article we re-examine the relationship between remittances and economic growth placing special attention on the nonlinearity of this relationship. Previous studies have ignored the non-linearity of the relationship between remittances and economic growth or have used a quadratic term to capture nonlinearity. We show that the relationship between remittances and growth is neither linear nor quadratic and propose the use of a semiparametric model to avoid the risk of misspecification bias from imposing an arbitrary functional form. We find evidence of a positive relationship between remittances and growth in parametric estimations; however, such a relationship disappears when nonlinearity is taken into account using non-parametric techniques.

The labour market consequences of hosting refugees

During the 1990s, the northwestern region of Tanzania experienced a large inflow of refugees. Using panel data (pre- and post-refugee inflow), we estimate the labour market consequences of hosting those refugees. Results are consistent with immigration affecting the allocation of natives across economic activities. Greater exposure to the refugee shock resulted in Tanzanians having a higher likelihood of working in household shambas or caring for household livestock and a lower likelihood of working outside the household as employees. The latter effect was particularly strong for Tanzanians doing casual work before the shock. This coincides with anecdotal evidence of refugees concentrating in casual waged work in Tanzania and competing directly with Tanzanians for those jobs.

Remittances and the Business Cycle: A Reliable Relationship?

The cyclical behaviour of remittances with respect to the receiving-country economy has important implications for economic and financial policies. Counter-cyclical remittance flows could form part of broader stabilisation policies in economic downturns and could also encourage receiving countries to adopt fixed (or less flexible) exchange-rate regimes. On the other hand, pro-cyclical flows may create an amplification effect of upturns or downturns in the receiving economy. There is an extant literature dedicated to exploring the cyclical nature of remittances. In general, the results tend to be country-specific and show that, for some migration and remittance corridors, remittances are counter-cyclical while, for others, they are pro-cyclical. This paper argues that the cyclical nature of remittances must be evaluated in a dynamic framework and that the relationship (between remittances and the receiving economy) is unlikely to be stable over time. Using data from Mexico, we show that remittances are counter-cyclical during some periods, but pro-cyclical at others. The changing cyclical nature of remittances questions the potential of remittances to smooth out cyclical fluctuations in output.

Return Migration and Economic Outcomes in the Conflict Context

We explore differences in economic outcomes between return migrant households and non-migrant households using panel data from Burundi, a country which experienced large scale conflict-led emigration to Tanzania and massive post-war refugee return. We exploit proximity to the border of Tanzania at birth for identification purposes. Results indicate that returnee households have significantly lower levels of livestock. Differences in current economic activities and legal restrictions on economic activities while in displacement are likely to explain a portion of the current economic gap between returnee and non-migrant households. There is no evidence for other channels (e.g. vulnerability to crime, health status).

The impact of hosting refugees on the intra-household allocation of tasks: A gender perspective

This paper examines whether the presence of refugees alters the intra-household allocation of tasks across genders in the hosting population. Using panel data (pre- and post-refugee inflow) from Kagera, a rural region of Tanzania, we find that the refugee shock led to women being less likely to engage in employment outside the household and more likely to engage in household chores relative to men. This is probably the result of the environmental degradation that accompanied the arrival of refugees and the additional competition for natural resources such as wood and water. However, the results differ by (pre-shock) literacy and maths skill. For women who could read and perform simple written mathematical operations the refugee shock resulted in a higher likelihood of engaging in outside employment. On the other hand, higher exposure to the refugee shock resulted in illiterate women being more likely to engage in farming and household chores.

Are Refugees’ Labour Market Outcomes Different from Those of Other Migrants? Evidence from the United Kingdom in the 2005-2007 Period

We merged the Survey of New Refugees (SNR) with the UK Labour Force Survey (LFS) to compare the labour market outcomes of refugees in the UK with those of other migrants. We compare new refugees with a full sample of LFS migrants and with a sample of recent LFS migrants. Controlling for relevant characteristics we find that eight and fifteen months after the grant of protection those in the SNR sample have significantly worse outcomes than those in the LFS sample, including a lower likelihood of being in employment and higher likelihood of unemployment. However, twenty-one months after the grant of protection the labour market outcomes of new refugees are not statistically different from those of recent migrants in the LFS sample and the difference with those in the full LFS sample decreases substantially. While refugees are initially at a significant labour market disadvantage the gap seems to disappear over time.