Trade Adjustment Costs in Developing Countries: - World Bank ...

12Adjustment to Internal MigrationGORDON H HANSON1. INTRODUCTIONIn this note I discuss recent empirical work on the consequences of global labormobility. I examine how international migration affects the incomes of individualsin sending and receiving countries and of migrants themselves. In consideringthe effects of labor mobility, I give equal weight to sending and receivingeconomies, meaning neither receives in-depth treatment. For more detailed discussionsof the literature on how immigration affects receiving countries, seeBorjas (1999a), and Card (2005); and on research into how emigration affectssending countries, see Docquier and Rapoport (2008), and Hanson (2007).In Section 2 I summarize facts about international migration that emerged fromrecently available data. In Section 3, I discuss empirical research on the consequencesof labor flows for incomes in sending and receiving countries and for migrantsand their family members. And in Section 4, I offer concluding remarks.2. DATA ON INTERNATIONAL MIGRATIONDespite large differences in income between countries, international migration isuncommon. Figure 12.1, using UN data, shows that in 2005 individuals residingoutside their country of birth comprised just 3 per cent of the world’s population.During the last two decades, the stock of international migrants has grown modestly,from 2.2 per cent of the world population in 1980 to 2.9 per cent in 1990and it grew marginally after that.Table 12.1 shows the share of the population that is foreign born in selectedOECD countries. The countries with the largest immigrant presence in 2005 areAustralia (24 per cent), Switzerland (24 per cent), New Zealand (19 per cent), andCanada (19 per cent). Australia, New Zealand, and Canada use a point system togovern applications for admission, in which individuals with higher levels of skillare favored for entry. Next in line are the large economies of Germany (13 percent), the United States (13 per cent), France (10 per cent), and the United Kingdom(10 per cent). The United States alone hosts 40 per cent of immigrants livingin OECD countries making it the world’s largest receiving country. The UnitedStates uses a quota system to govern legal immigration, with two-thirds of visasreserved for family members of US citizens or residents. European countries tend