Chapter 12 - Immigration and the international trade of labor. After completing this unit, you should be able to: Describe the extent of international migration, assess the costs and benefits of migration for migrants, assess the costs and benefits of migration for host and home countries, define and describe the extent of outsourcing and offshoring.
Trang 1Introduction to Economics: Social Issues and Economic Thinking
Wendy A Stock
PowerPoint Prepared by
Z Pan
Chapter 12
Immigration and the
Trang 2Ø Describe the extent of
international migration
Ø Assess the costs and benefits of
migration for migrants
Ø Assess the costs and benefits
of migration for host and home countries
Ø Define and describe the extent of outsourcing and offshoring
Copyright © 2013 John Wiley & Sons, Inc. 2
After studying this chapter, you should be
able to:
Trang 3Ø An Immigrant is someone who migrates into a host country.
Ø An Emigrant is someone who migrates out of their home country.
Immigrant and emigrant
Trang 4Copyright © 2013 John Wiley 4
International Migrants as a Percentage of the
Population
Trang 5U.S Immigrant Population by State 2010
Trang 6Ø Monetary costs and benefits:
• the differences in earnings and cost of living across locations,
• the cost of flying or driving to the host location
• the cost of moving belongings
Ø Nonmonetary costs and benefits:
• changes in the distance from family and friends
• changes in recreation and leisure opportunities
• changes in language, cultural, and governmental
differences
Costs and Benefits for Immigrants
Trang 7Ø Improvement in earnings opportunities attract
immigrants
Ø Higher monetary or other costs of moving reduce immigration
Ø People who are financially secure and have more labor skills are more likely to migrate than others
Ø Younger individuals are more likely to migrate than older individuals
Determinants of Immigration
Trang 8Copyright © 2013 John Wiley 8
Impacts of Immigration on Host Country
Labor Markets
Trang 9Impacts of Immigration on Host Country
Labor Markets
Trang 10The impact of immigrants on local labor markets depends on whether immigrants are complements
or substitutes for native workers, which in turn
depends on the level of training and skills that
immigrants bring to the labor market.
Importance of Immigrants’ Skills
Trang 11Skill levels of Immigrant Population in the
U.S.
Trang 12Ø Immigration has impacts on product markets in both host and home countries because changes
in the size of a population generate changes in the demand for goods and services.
Ø e.g U.S tortilla sales revenue grew from $300 million to over $1.5 billion per year between 1980 and 1990
Impacts of Immigration on Product
Markets
Trang 13Ø Costs – Pressure on host country resources: (public schools, roads, other government services)
Ø Benefits – Contribution immigrants generate
(including tax revenue)
Ø The National Research Council estimated that over the course of a lifetime, the average U.S immigrant pays about $115,000 more in taxes (in 2011 dollars) than he uses in public resources
Impacts of Immigration on Host Country
Resources
Trang 14Copyright © 2013 John Wiley 14
The Impact of Emigration on Home Country
Labor Markets
Trang 15Ø Remittances are transfers of money to home
countries by workers who have emigrated
Ø Remittances are an important source of income for emigrants family members in many developing
countries
Ø Remittances generate increases in the demand for normal goods and services in the home country
Remittances
Trang 16Ø Outsourcing occurs when someone hires another person or firm to produce a good or service
from one country to another
Ø Controversy surrounding outsourcing arises
because the distribution of the costs and benefits of outsourcing are not equally shared
OUTSOURCING AND OFFSHORING AS INTERNATIONAL TRADE IN LABOR
Trang 17The Impact of Outsourcing on Home Country
Labor Markets
Trang 18Copyright © 2013 John Wiley 18
The Impact of Outsourcing on Home Country
Product Markets
Trang 19In a recent speech, a U.S government official stated,
“The physical distance along a great circle from
Wausau, Wisconsin to Wuhan, China is fixed at
7,020 miles [However] One of the defining
characteristics of the world in which we now live is
that, by most economically relevant measures,
distances are shrinking rapidly .” How will the
“shrinking distance” between the U.S and China
affect labor markets in the U.S.? Assume that wages
for accountants are lower in China than in the United
Trang 20Copyright © 2013 John Wiley 20
Key Concepts
• Immigrant
• Emigrant
• Outsourcing
• Host country
• Home country
• Offshoring