An Evaluation of International Migration Theory: The North American Case

Citation: Massey, et al. (1994) An Evaluation of International Migration Theory: The North American Case.
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Summary

Problems with census data: they underenumerate undoc'd migrants, they provide no info on legal status, and they are ill-suited to the study of immigration as a process rather than an event. The initiation of international migration Neoclassical economics Traditional neoclassical economics views international migration as a simple sum of individual cost-benefit decisions undertaken to maximize expected income thru international movement. For undocumented migrants, this also takes into account probability of successfully entering the destination country and evading deportation. The difference between incomes expected at origin and destination, when summed and discounted over some time horizon and added to the negative costs of movement, yields the expected net gain from movement, which if positive promotes migration (Sjaastad 1962; Todaro 1969; Todaro and Maruszko 1987).

According to neoclassical theory, flows of labor move from low-wage to high-wage countries, and capital (including human capital) moves in the opposite direction. As a result, migration exerts downward pressure on wages in destination countries and upward pressure on wages in sending countries until an equilibrium is reached.

This theory hasn't been put to too much rigorous test. Studies generally have not examined expected wages (the product of wages and employment rates), which since Todaro (1969) have been accepted theoretically as the relevant determinant of migration flows.

The accumulated empirical evidence generally supports the neoclassical theory's fundamental proposition that immigration is tied to international differences in wage rates (Mexico: Taylor 1987; PR; El Salvador: Funkhouser 1992). It is also clear, however, that international migration is not fully explained by wage gaps alone. International wage gaps may not be the most important factor in determining migration decisions. Employment variables (such as unemployment ratios) tend to matter as much if not more than wage variables. The new economics of migration This theory argues that international migration stems from failures in other markets that threaten the material well-being of households and create barriers to the economic advancement. Unlike the neoclassical model, the new economics model does not posit complete and well-functioning markets. Indeed, it recognizes that in many settings, particularly in the developing world, markets for capital, futures, and insurance may be absent, imperfect, or inaccessible. In order to self-insure against risks to income, production, and property, or to gain access to scarce investment capital, households send one or more workers to foreign labor markets. There is growing evidence that poor households use international migration in a deliberate way to diversify their labor portfolios Dominican Republic (Bray 1984; Portes and Guarnizo 1990; Grasmuck and Pessar 1991); PR (Jackson 1984; Rodriguez 1988); Mexico (Massey et al, 1987; Durand and Massey 1992); etc. In these countries, it is clear that rural communities are not isolated, economically autonomous entities, if they ever were. Rather they are closely connected to national and international markets and rely heavily on migrant earnings to support local investment and consumption. Such linkages between families in sending regions and migrants working in foreign settings contradict the assumptions of the neoclassical human capital model. According to this model, individuals relocate permanently in whatever sector yields the highest expected lifetime income and they play little role in the economic life of the sending community thereafter. Income transfers in the form of remittances are outside the realm of the traditional neoclassical model. In traditional neoclassical model, because risk is disregarded and all markets are assumed to be complete and well-functioning, production decisions are presumed to be independent of household budget constraints and other sources of income (Taylor 1992). Migrant remittances increase the utility of households by loosening the budget constraint on consumption by the amount of the remittances; but unless relative prices change, they should not influence other income-generation activities. In reality, remittances increase the productive use of machinery, land, and hired labor by households (Fletcher and Taylor 1992). In addition, they promote the acquisition of income-producing assets such as livestock, equipment, and education (Taylor and Wyatt 1993). As a result, remittances from the US raised household income by more than the value of the remittances themselves, something not allowed under neoclassical theory. High wages available in the US thus offer Mexicans an incentive to migrate not only because they yield higher expected lifetime earnings, but also because they offer poor families a way to loosen liquidity constraints and manage risks. The new economics of migration has also challenged the neoclassical assumption that higher income has a uniform effect in promoting migration at all socioeconomic levels. According to new economics, households migrate not only to improve absolute income, but also to increase their incomes relative to others in the community. RELATIVE DEPRIVATION (Stark 1991) depends on where a household is located in the income distribution: the greater the share of income earned by households above it, the greater the sense of relative deprivation. (Stark and Taylor 1989) found it had an effect on probability of undocumented migration. Segmented labor market theory This theory sees immigration as demand-driven, built into the economic structure of advanced industrial societies (Piore 1979). Inherent tendencies in modern capitalism lead to a bifurcated labor market, creating a primary sector that produces jobs with secure tenure, high pay, generous benefits, and good working conditions, and a secondary sector typified by instability, low pay, limited benefits, and unpleasant or hazardous working conditions. Workers in developed societies don't want to take those secondary sector jobs. As a result, employers seek to recruit immigrants to full secondary sector positions rejected by native (Piore 1979). If immigrant workers were recruited into the secondary labor market to work at unstable, poorly paid jobs with few mobility prospects, then we would expect to observe lower returns to education, skills, and work experience compared with natives. There is some evidence for this. Because human capital is not rewarded in the US secondary labor market, Mexicans with skills and education have tended to migrate internally rather than internationally. However, during times of economic crisis, this changes. Portes and Bach (1985), studying Cuban and Mexican migrants, found that trajectory of occupational mobility conformed more closely to the predictions of segmented labor market theory. As work experience, education, and occupation aspirations rose among immigrants in the primary sector, so did the socioeconomic status of their job; but only education predicted occupational status in the secondary sector and the rate of return to schooling was half that observed in the primary sector. Considering Cubans, a third sector is the ethnic enclave which had high returns to education and experience. Immigrants working in the enclave are apparently willing to trade low wages upon arrival for a greater chance of advancement and independence later on norm of ethnic solidarity. Good example of getting stuck in secondary sector Mexican labor contractors (absorb the risk of employer sanctions, post-IRCA) are more likely to exploit the workers they employ than to offer opportunities for advancement. Problems with research: It is not clear that labor market segmentation explains all or even most of the demand for immigrants. Recruitment represents one of the several possible inducements to migrate, but immigration flows are also related to wage differentials, capital constraints, and risk diversification.

World systems theory According to world systems theory, international migration follows directly from the globalization of the market economy (Portes and Walton 1981; Sasses 1988). As capitalism extends outward from core nations, and as market relations penetrate countries in the developing and former communist world, noncapitalist patterns of social and economic organization are disrupted and transformed. In the process of market penetration, however, large numbers of people are displaced from secure livelihoods as peasant farmers, family artisans, and employees of state-owned industries, creating a mobilized population prone to migrate, both internally and internationally (Massey 1988).

Global cities form. The congregation of high-income workers and wealthy capitalists in global cities creates a demand for ancillary workers in restaurants, hotels, construction, maintenance, and personal services. Since natives are reluctant to accept onerous jobs at low pay, and since service jobs cannot easily be shifted overseas, employers recruit immigrants into these positions. Once immigrant communities become established, they create their own jobs that further accentuate the demand for immigrant labor. Their movement is facilitated by new transportation and communication and cultural links that stem from the penetration of capitalist cultural products and social attitudes into the peripheral societies. The limited empirical research to date generally supports world systems theory (Ricketts 1987 annual rate of outmigration to the US from 1970 to 1979 was strongly related to growth in US investment from 1966 to 1977, controlling for size of country, per capita income, and rate of population growth; Walker, Ellis and Barff 1993 immigration flows were directed toward metropolitan areas that were experiencing a rapid growth in value added (i.e., global cities), but the arrival of immigrants and the rapid growth in value added were associated with a strong outmigration of blue collar workers), but is theoretical propositions have not received sufficient analytic attention and it is difficult to dram firm conclusions. The perpetuation of international migration Network theory Migrant networks are sets of interpersonal ties that connect migrants, former migrants, and nonmigrants in origin and destination areas thru ties of kinship, friendship, and shared community origin. The existence of these ties is hypothesize to increase the likelihood of emigration by lowering the costs, raising the benefits, and mitigating the risks of international movement. Network connections are social capital (Boyd 1989; Gurak and Caces 1992).

Evidence from Mexican migration suggests that over time, the migration decision becomes increasingly disconnected from social and economic conditions in the sending community and determined more by the accumulation of migration-related human capital and social capital in the form of network connections. The evidence accumulated so far is strong and consistent in confirming the powerful role of migrant networks in structuring individual and household migration decisions, and in promoting and directing aggregated flows of immigrants. Indicators of migrant stock consistently predict settlement patterns of immigrants to the US in both historical and contemporary data, and the possession of a kinship connection to a current of former international migrant increases the odds that individuals or families will become involved in international migration themselves (Massey and Garcia Espana 1987; Taylor 1986; Neuman and Massey 1994; etc.). Cumulative causation Cumulative causation refers to the tendency for international migration to perpetuate itself over time, regardless of the conditions that originally caused it. At the individual level, this self-perpetuation stems from the fact that each act of migration alters motivations and perceptions in ways that encourage additional migration. Migrants are changed by the experience of living and working in an advanced industrial economy. The knowledge and skills they acquire increase their productivity and raise their value to employers, and thereby elevate their expected wages. Thru migration, they also gain valuable info about how to arrive, get around, and find work, thereby reducing the costs and risks of movement. In addition, they acquire tastes for modern consumer goods and new aspirations for socioeconomic mobility, thus changing their motivations. As a result of these changes, people who migrate once are quire likely to do so again. Although international migration may begin as a short-term strategy for income generation, one trip leas to another and over time the duration of trips grows and foreign experience accumulates (Piore 1979). Some evidence comes from the Philippines (DeJong et al. 1983) and Mexico (Massey 1987; Donato, Durand, and Massey 1992; etc.) Massey et al. 1994 FINALLY mention women here.