Migration and the Labour Market: An analysis for Argentina

ALEJANDRA DANIELA CRISTINA

Universiteit Antwerpen

Lugar: Antwerpen; Año: 2012 p. 173

978-90-8994-066-7

The objective of the book is to cover the main aspects related to labour market effects of migration in Argentina, focusing basically on two questions: Why do people move? and What happens when they move? In order to answer these questions, three main issues were covered throughout the thesis: what are the reasons behind an individual’s decision to move, the characteristics of migrants compared to natives - focusing on self-selection, and the dynamics of integration into the labour market. The empirical answer to the first question posed above is analyzed considering the response of the individuals to regional wage differentials, based on individual data. A random effects logit for panel data models the migration decision. The research shows that people do take into account the real expected income they would earn in any alternative destination, migrating if this income exceeds the expected income in their places of origin, including in this way in their calculus a rational calculation. It is also shown that amenities exert an influence on a potential mover. Besides, in the case of Argentina amenities do influence a person’s migration decision: when individuals consider migrating they also take into account factors such as the security in the area they would move to, the government benefits they would receive, the presence (or absence) of infrastructure, being more prone to move the higher the average temperature, the higher the expenditure in health and employment programs, and the lower the crime rate and the lack of infrastructure in the metropolitan area of destiny. One of the standard propositions in the migration literature is that economic migrants tend to be favourably self-selected for labour market success. That is, migrants are described as tending, on average, to be more able, ambitious, aggressive, entrepreneurial, or otherwise more favourably selected than similar individuals who choose to remain in their place of origin. The research disentangles whether migrants are drawn randomly from the population, or they are somehow self-selected. The Heckman procedure to account for selection bias points to the presence of negative self-selection in the case of Buenos Aires and Mendoza, and there is some indication that in the other metropolitan areas this result also holds. This finding goes in the opposite direction of most of the literature on self-selection that generally finds that positive self-selection applies. The last paper deals with the effects on the labour market that appears once migration has taken place. The study focus is on Greater Buenos Aires and Capital Federal, studying unemployment dynamics that both migrants and natives face in destination areas. In particular, the Chapter focus on the exit rates out of unemployment for both natives and migrants, and whether these rates vary with the time spent in the host region. However, according to both Kaplan Meir survival estimates and to the hazard of employment that is obtained by means of the Cox model, there seems to be no difference in terms of hazard of employment between natives and migrants. There is, as well, weak support for a higher hazard of employment for more time spent in the host region. A second step in the research was to check if due to the high flexibility of the Argentinean labour market, the segmentation occurs instead of through difference in unemployment duration, via prices. The analysis seeks to determine if there are long-lasting differences in the average wage rates among groups of workers, who are presumed to be equally productive or to have equally productive capacity. The analysis includes a Mincer formulation, since if a labour market determinant such as educational attainment depends on inputs supplied earlier in life, then differences in labour market outcomes will not be attributable to labour market discrimination. The estimation results show that in Argentina the wages of migrants are lower than that of natives, which leads to the conclusion that the adjustment appears to be in terms of wages rather than in unemployment duration. The results are relevant in different ways. The first result has to do with a strategic viewpoint and with the quite different density of population the country has. If there was an objective of densification of certain areas (for example the South for strategic purposes), the Government should intervene in the labour market to increase enough the wages in the areas, and the desired movements of persons would result as consequence. The second has to do with the profile of the people that moves: since in Argentina the movers are negatively selected, there is no brain drain in the process and there is no need to intervene in the labour market. The third result is that movers in Argentina are subject to immigrant penalties in the labour market, since they tend to obtain a lower payment for their job. This is important, and should be taken into consideration in order to find the best way the State can intervene to diminish discrimination.