Publications by PSE researchers

We investigate the bidirectional relationship between immigration and right-wing populism, which we characterize as a self-reinforcing dynamic process where anti-immigrant rhetoric and populist policies lead to a deterioration in the average education and skill level of immigrants. The deterioration in the ratio of high-skill to low-skill immigrants in turn fuels populist support and anti-immigration attitudes, creating what we call “the vicious circle of xenophobia”. We review some historical and contemporary studies that are suggestive of such vicious circle. In particular, recent cross-country evidence shows that low-skill immigration tends to exacerbate populism, while high-skill immigration tends to mitigate it. Conversely, populist policies and xenophobic attitudes have a strong repulsive effect on highly-skilled immigrants and result in adverse immigrant selection. We use the empirical results from those studies to inform a theoretical model of joint determination of immigrants’ skill-ratio and right-wing populism levels. The model displays multiple equilibria, with the inferior equilibrium – corresponding to our vicious circle — characterized by high levels of right-wing populism and a high proportion of low-skill workers among immigrants. In this framework, structural trends such as internet penetration, economic erosion of the middle class, demographic pressure from poor countries as well as adverse cyclical shocks make the good, efficient equilibrium less likely and the inferior equilibrium of explosive populism and deteriorated immigrants’ skill-ratio more likely.

Using provisions to ease the movement of business visitors in trade agreements, we show that removing barriers to the movement of business people promotes trade. We document the increasing complexity of Free Trade Agreements (FTAs) and develop an algorithm that combines machine learning and text analysis techniques to examine the content of FTAs. We use the algorithm to determine which FTAs include provisions to facilitate the movement of business people and whether these are included in dispute settlement mechanisms. We show that provisions facilitating business travel are effective in promoting them and eventually increase bilateral trade flows. The paper provides (indirect) evidence of the role of face-to-face interaction on aggregate bilateral trade flows.

Macroeconomic Instability, Migration, and the Option Value of Education

How do immigrants promote exports? To answer this question we propose an empirical framework allowing to disentangle the role of migration networks that operate at a bilateral level from that of productivity channels (knowledge diffusion and increased workforce diversity) that operate at the aggregate level. We find evidence supporting both, at the extensive as well as at the intensive margin. The results are robust to using various IV strategies. While richer countries’ exports tend to benefit more from immigrants’ diversity (especially in sectors characterized by complex production processes), developing countries benefit from knowledge diffusion more.

We argue that migrants played a significant role in the diffusion of the demographic transition from France to the rest of Europe in the late 19 th century. Employing novel data on French immigration from other European regions from 1850 to 1930, we find that higher immigration to France translated into lower fertility in the region of origin after a few decades -both in crossregion regressions for various periods, and in a panel setting with region fixed effects. These results are robust to the inclusion of a variety of controls, and across multiple specifications. We also find that immigrants who themselves became French citizens achieved lower fertility, particularly those who moved to French regions with the lowest fertility levels. We interpret these findings in terms of cultural remittances, consistently with insights from a theoretical framework where migrants act as vectors of cultural diffusion, spreading new information, social norms and preferences pertaining to modern fertility to their regions of origin.

Using provisions to ease the movement of business visitors in trade agreements, we show that removing barriers to the movement of business people promotes trade. We document the increasing complexity of Free Trade Agreements and develop an algorithm that combines machine learning and text analysis techniques to examine the content of FTAs. We use the algorithm to determine which FTAs include provisions to facilitate the movement of business people and whether these are included in dispute settlement mechanisms. We show that provisions facilitating business travel are effective in promoting them and eventually increase bilateral trade flows. The paper provides (indirect) evidence of the role of face-toface interaction on aggregate bilateral trade flows.

During the early 1990s Germany offered temporary protection to 700,000 Yugoslavian refugees fleeing war. By 2000, many had been repatriated. We exploit this natural experiment to investigate the role of returning migrants in boosting export performance upon their return. Using confidential German administrative data we find that industries with 10% more returning refugees exhibit larger exports between the pre- and post-war periods by 1 to 1.6%. We use exogenous allocation rules for asylum seekers within Germany as an instrument to deal with endogeneity concerns. We show evidence pointing to productivity shifts as the main mechanism behind our results. Consistently, we find our results are driven by refugees in occupations more apt to transfer knowledge, technologies and best-practices.

We use a multilevel approach to investigate whether a general and robust relationship between weather shocks and (internal and international) migration intentions can be uncovered in Western African countries. We combine individual survey data with measures of localized weather shocks for thirteen countries over the 2008-2016 period. A meta-analysis on results from about 51,000 regressions is conducted to identify the specification of weather anomalies that maximizes the goodness of fit of our empirical model. We then use this best specification to document heterogeneous mobility responses to weather shocks. We find that variability in SPEI/rainfall is associated with changing intentions to move locally or internationally in a few countries only. However, the significance, sign and magnitude of the effect are far from being robust and consistent across countries. These differences might be due to imperfections in the data or to differences in long-term climate conditions and adaptation capabilities. They may also suggest that credit constraints are internalized differently in different settings, or that moving internally is not a relevant option as weather conditions are spatially correlated while moving abroad is an option of last resort. Although our multilevel approach allows us to connect migration intentions with the timing and spatial dimension of weather shocks, identifying a common specification that governs weather-driven mobility decisions is a very difficult, if not impossible, task, even for countries belonging to the same region. Our findings also call for extreme caution before generalizing results from specific case-studies.

We use a multilevel approach to investigate whether a general and robust relationship between weather shocks and (internal and international) migration intentions can be uncovered in Western African countries. We combine individual survey data with measures of localized weather shocks for 13 countries over the 2008–2016 period. A meta-analysis on results from about 51,000 regressions is conducted to identify the specification of weather anomalies that maximizes the goodness of fit of our empirical model. We then use this best specification to document heterogeneous mobility responses to weather shocks. We find that variability in Standardized Precipitation Evapotranspiration Index/rainfall is associated with changing intentions to move locally or internationally in a few countries only. However, the significance, sign and magnitude of the effect are far from being robust and consistent across countries. These differences might be due to imperfections in the data or to differences in long-term climate conditions and adaptation capabilities. They may also suggest that credit constraints are internalized differently in different settings, or that moving internally is not a relevant option as weather conditions are spatially correlated while moving abroad is an option of last resort. Although our multilevel approach allows us to connect migration intentions with the timing and spatial dimension of weather shocks, identifying a common specification that governs weather-driven mobility decisions is a very difficult, if not impossible, task, even for countries belonging to the same region. Our findings also call for extreme caution before generalizing results from specific case studies.

We empirically investigate the relationship between a country’s economic complexity and the diversity in the birthplaces of its immigrants. Our cross-country analysis suggests that countries with higher birthplace diversity by one standard deviation are more economically complex by 0.1 to 0.18 standard deviations above the mean. This holds particularly for diversity among highly educated migrants and for countries at intermediate levels of economic complexity. We address endogeneity concerns by instrumenting diversity through predicted stocks from a pseudo-gravity model as well as from a standard shift-share approach. Finally, we provide evidence suggesting that birthplace diversity boosts economic complexity by increasing the diversification of the host country’s export basket.

The cultural integration of immigrants conditions their overall socio-economic integration as well as natives’ attitudes towards globalisation in general and immigration in particular. At the same time, excessive integration—or assimilation—can be detrimental in that it implies forfeiting one’s ties to the origin country and eventually translates into a loss of diversity (from the viewpoint of host countries) and of global connections (from the viewpoint of both host and home countries). Cultural integration can be described using two dimensions: the preservation of links to the origin country and culture, which we call origin attachment, and the creation of new links together with the adoption of cultural traits from the new residence country, which we call destination attachment. In this paper we introduce a means to quantify these two aspects based on Twitter data. We build origin and destination attachment indices and analyse their possible determinants (e.g., language proximity, distance between countries), also in relation to Hofstede’s cultural dimension scores. The results stress the importance of language: a common language between origin and destination countries favours origin attachment, as does low proficiency in the host language. Common geographical borders seem to favour both origin and destination attachment. Regarding cultural dimensions, larger differences among origin and destination countries in terms of Individualism, Masculinity and Uncertainty appear to favour destination attachment and lower origin attachment.

We analyze the effect of immigration on attitudes toward income redistribution in twenty-eight European countries over the period 2002 to 2012, before the “refugee crisis.” We find that native workers lower their support for redistribution if the share of immigration in their country is high. This effect is larger for individuals who hold negative views regarding immigration but is smaller when immigrants are culturally closer to natives and come from richer-origin countries. The effect also varies with native workers’ and immigrants’ education: more educated natives support more redistribution if immigrants are also relatively educated. Overall, our results show that the negative effect of immigration on attitudes toward redistribution is relatively small and is counterbalanced among skilled natives by positive second-order effects for the quality and diversity of immigration.