Labor Market Determinants of Migration Flows in Europe ABSTRACT. Considerable research attention has focused on the labor market effects of immigration, the performance and competitiveness of the European labor market, and the costs and benefits of labor mobility for sending and receiving countries. The aim of the present study is to examine and evaluate the negative social ef¬fects resulting from the circulation of workers, the social and economic determinants of migration, and the impact of immigration on natives’ labor market outcomes such as wages and employment. Keywords: labor market; migration flow; Europe; employment; sending and receiving countries 1. Introduction In this paper I am particularly interested in exploring the impact
To some degree these differences remain despite national statistical agencies increasingly adopting the definition of unemployment by the International Labor Organization. To facilitate international comparisons, some organizations, such as the OECD, Eurostat, and International Labor Comparisons Program, adjust data on unemployment for comparability across countries. Though many people care about the number of unemployed individuals, economists typically focus on the unemployment rate. This corrects for the normal increase in the number of people employed due to increases in population and increases in the labour force relative to the population. The unemployment rate is expressed as a percentage, and is calculated as
The macro section of Neoclassical Economics theory, in summary, states that the sole purpose of migration pertains to the exceptional imbalance in labor supply, labor demand, which leads to wage differentials in different countries. As a result, workers from low wage countries tend to move to high wage countries, which ultimately leads to the micro section of this theory. Moreover, people act as individuals to make rational choices based on their expectations of the cost and benefits that migrating will produce (Notes 1/22). Individuals perceive migration, according to this section of the theory, to be an investment in human capital. Migration has a tendency to influence where they can be the most productive and have a positive net return.
The first scholarly contribution to migration is by Ravenstein (1885:1889)’s “laws of migration”. According to his neo-classical equilibrium perspective, he saw migration as an inseparable part of development and the major causes of migration were economic. In other words, people are expected to move from low income to high-income areas, from dense areas to sparsely populated areas. This is an underlying assumption of Lee (1966)’s push-pull theory of migration. In the view of push and pull migration theory, the decision of migrate is determined by the factors to associate with the area of origin, are of destination and supply-push factors in the origin area and the network factors that link origin and destination.
Review of Theories 2.2.1 Theories of Unemployment Over the years, numerous theoretical hypotheses/theories have been offered to explain the linkage between productivity (economic) growth and unemployment in both developing and developed economies. Due to the contentious debate as to whether or not real business cycle actually accounts for the nexus between unemployment and productivity growth or not. Hence, this current study would highlight and briefly discuss few of such theories which among others includes; the Veblen theory of unemployment, job Search-matching theory, theory of low – frequency movement via asymmetric real wage rigidities etc. 184.108.40.206 Classical Theory of Unemployment The classical theory, as analyzed by Pigou (1933) and Solow (1981), argues that the labor market consists of demand and supply of labor. The demand for labor is seen as a derived demand which is gotten from the downward movement of the marginal product of labor.
This theory will help evaluate migration in a functionalist perspective to further acquire and understand reasons for migration. Since the main causes of migration according to the functionalist theory are economic, environmental and demographic factors, the economic factor is one of the most common. Since the region of SADC consist of both poor and rich countries it is more likely that the factors push migrants outside of their countries and pull them in more economically
The degree of unemployment in a nation indicates the economic health of the country. Unemployment rate is used to measure the mess to take full advantages of labour resources because it signifies the percentage of labour force that is unemployed but are willing and actively seeking for work. Unemployment rate provides a precise measurement which was assured by The Bureau of Labour Statistics. However, there are several factors that affect the unemployment rate in a nation such as company downsizing, merger or acquisition, changes in technology and foreign competition, and job outsourcing to other nations. Long term unemployment creates a very large amount of cost for an individual and economy as a whole.
The profit value of a firm depend on aggregate demand, national income and general price level. Similarly, the help of Micro-economics is inevitable for Macroeconomics. For example, nation output and income are the sum of income of million individuals and numerous firms respectably. Hence, the theory of the study of individual units and aggregate are both equally important. If we analysis Macroeconomics variable and its relationship, we must also allow for changes in Microeconomic variable, that can affect the Macroeconomic variables.
According to Zolberg, there are two international migration theories. The first one is micro-analytic theory. This perspective approaches to international migration from classical economic view. According to the theories driven by this perspective, wage differentiates between sending and receiving countries are the major reasons for people to migrate. However, by looking at the discussions as we do above like historical ties, state intervention etc.
One possible explanation to this issue could be the problem of outsourcing, where there is a distinctive difference with regards to the rise in productivity between the skilled and unskilled workers. The article also utilised economic theories such as the Kuznets Hypothesis to explain the problem of rising inequality as a result of globalisation. In my paper, I will seek to provide an in-depth analysis to explain why globalisation may struggle to promote equality within the world’s poorest countries. The most commonly used measure of income inequality is the Gini coefficient. A Gini coefficient of one suggests that a country’s entire income goes to one person, representing perfect inequality.