Three Essays on Migration Economics

This thesis examines the selection of immigrants and their impact on the receiving economy. After an introductory first chapter, I present an analysis of Borjas model of selection extended to multiple locations. In this extension, selection is determined by earnings’ dispersion alone only for the most and least disperse locations. Therefore, it highlights that, what determines selection, is the ranking of locations rather than the relative dispersion of earnings between home and destination. Using interstate US migration, I provide stochastic dominance relations on pre-migration earnings that support the implications of the model. These give a stronger test for selection than selection on means. The third chapter presents evidence on the effect of immigrants on aggregate labour productivity in the UK. I exploit variation on past settlement of natives across industries and regions to estimate the effect of immigrants on labour productivity. My estimates show that increasing the relative supply of immigrant labour has a positive effect on labour productivity. I show that part of this effect works through accumulation of capital stocks and provide evidence suggesting that immigrants trigger the development of technologies that complement them. Thus, I show that altering the labour mix produces effects that go beyond simple differences in marginal products and affects the accumulation of other inputs and technologies. In the fourth chapter, Greta Morando and I exploit cross-cohort variation within majors and universities to estimate the effect of foreign peers on native students. We show that increasing the share of EU students lowers the probability of entering a university major. But, conditional on university and major, foreign peer effects on educational and early labour market outcomes are mild. Therefore, our research shows that there are no large foreign peer effects in higher education. However, it also suggests that there is scope for foreign students affecting natives’ outcomes by shaping the universities and majors natives attend.