Simone Bertoli

Exchange Market Pressure: Some Caveats In Empirical Applications

The Exchange Market Pressure (EMP) index, developed by Eichengreen et al. (1994), is widely used as a tool to signal whether pressure on a currency is softened or warded off through monetary authorities’ interventions or, rather, a currency crisis has originated. In this article we show how the index is sensitive to some assumptions behind the aggregation of the information available (exchange rates, interest rates and reserves), especially when emerging countries are involved. Specifically, we address the way exchange rate variations are computed and the impact of different definitions of the reserves, and we question the constancy of the weights adopted. These issues compound with the choice of a fixed threshold when crisis episodes are identified through the EMP index. As a result, one should exert caution in subsequent econometric analyses where a dependent binary variable is built to identify crisis periods.

Migration, Remittances and Poverty in Ecuador

Abstract We analyse the influence of the recent wave of migration on the incidence of poverty among stayers in Ecuador. We draw our data from a survey that provides detailed information on migrants. The analysis reveals a significant negative effect of migration on poverty among migrant households. This effect is substantially smaller than the one that we find focusing on recipient households. We explore the factors that account for this divergence. Our analysis entails that the existing empirical evidence on the relationship between remittances and poverty does not need to be informative about the size of the direct poverty-reduction potential of migration.

Networks, Sorting and Self-Selection of Ecuadorian Migrants

This paper provides new empirical evidence about the influence exerted by migration networks upon migrants‟ self-selection in education from the analysis of the recent process of Ecuadorian migration. The severe economic crisis that hit Ecuador in the late 1990s induced a massive wave of migration, from a country which was characterized by a substantial geographical variability in the size of migration networks. As Ecuadorian migrants opted for a variety of destination countries in the aftermath of the crisis, we estimate a multinomial logistic model to assess the impact of migration networks on both migrants‟ sorting and self-selection. The estimates are in line with the theoretical arguments which predict that migration networks increase the likelihood or the extent of a negative self-selection of the migrants with respect to education.

Heaven's Swing Door: Endogenous Skills, Migration Networks and the Effectiveness of Quality-Selective Immigration Policies

A growing number of OECD countries are leaning toward the adoption of selective immigration policies, which are expected to raise the quality (or education level) of migrants. This view neglects two important dynamic effects: the role of migration networks, which could reduce the quality of migrants, and the responsiveness of education decisions to the prospect of migration. We propose a model of self-selection into migration with endogenous education choices, which predicts that migration networks and the quality of migrants can be positively associated when destination countries adopt sufficiently selective immigration policies. Empirical evidence, presented as background motivation, suggests that this is indeed the case.

A Fragile Guideline to Development Assistance

The concept of fragility has gained an increasing relevance in the development discourse. Still, fragility remains a fuzzy and elusive concept. This paper presents a review of the literature, and it identifies two main sets of definitions of fragility, which substantially differ in their focus and breadth, and that reflect evolution of the discourse around this developmental concept. The limited consensus that is found in the literature suggests that the analytical salience and the direct operational value-added of this concept still remain unclear. Nevertheless the debate around state fragility played an important advocacy role, and it has offered key methodological insights with respect to the challenges that donors face, and on what it can be realistically achieved through external engagement.

The Impact of Material Offshoring on Employment in the Italian Manufacturing Industries: The Relevance of Intersectoral Effects

The lively media debate on the employment consequences of offshoring is not yet backed by an adequate empirical evidence around its actual effects. This paper relies on sectoral data to assess the impact of material offshoring on employment in the Italian manufacturing industries; with just one exception, sectoral-level analysis treat sectors as independent clusters of firms, while we introduce an index built on input-output data that captures the intersectoral spill-over effects of offshoring. The econometric analysis provides evidence that the direct effects of offshoring on employment are not significant once one allows for scale effects, while the intersectoral effects are negative and highly significant. This is consistent with the intuition that offshoring can lead to the disruption of domestic sub-contracting relationships, and that the adverse occupational consequences are not concentrated in the sectors that are directly involved in the offshoring process. Although such a finding should by no means regarded as supportive of a pessimistic perspective about the aggregate economic consequences of offshoring, it is nevertheless suggestive transitional costs can be substantial and diffuse.

Extending the case for a beneficial brain drain

Summary Several destination countries still adopt general immigration policies, and are characterized by lower returns to education than the countries of origin of the migrants. These two stylized facts challenge the literature on the beneficial brain drain which demonstrates that migration can increase the average human capital in the sending countries if immigration policies are selective, or the skill premium at destination is higher than at origin. We propose a model with empirically sensible assumptions on immigration policies and skill premia, where individuals face heterogeneous and correlated education and migration costs. The model is consistent with a robust stylized fact, namely that the rate of migration increases with schooling, and it shows that the average level of education of the stayers can be increasing in the probability to migrate even in such a setting. Our simulation results prove that these findings hold for reasonable parameter values. This extends the case for a beneficial brain drain in a further direction.

The Elasticity of the Migrant Labour Supply: Evidence from Temporary Filipino Migrants

Abstract The effect of immigration on host and origin countries is mediated by the way migrants take their labour supply decisions. We propose a simple way of integrating the traditional random utility maximisation model used to analyse location decisions with a classical labour demand function at destination. Our setup allows us to estimate a general upper bound on the elasticity of the migrant labour supply that we take to the data using the evolution of the numbers and wages of temporary overseas Filipino workers between 1992 and 2009 to different destinations. We find that the migrant labour supply elasticity can be very large. Temporary migrants are very reactive to economic conditions in their potential destinations.