In: Economics
What are the two basic theories of immigration on home country labor markets?
The new economics of labor migration theory
More recently, an alleged theoretical “alternative” to the theories
presented above
has been put forth under the guise of the so-called New Economics
of Labor Migration,
which has purportedly sought to redress both the excessive
structural emphasis of the
historical-structural perspective and the theoretical
insufficiencies of the standard
neoclassical theoretical framework. According both to its
proponents and
to latter-day authors reviewing the literature . this
theory has thus constituted a fundamentally new theory – one which
effectively reconciled
agency and structure and allowed for “a greater variety of outcome
than would have been
allowed from either the single aggregation of individual decision
making or from the
unidirectional imperatives of structures”
Appeared in the specialized theory regarding migration by the end
of the last
century, the new economy of migration questions some of the ideas
regarded in creating
the neoclassic theory.either by arguing against them, or by
completing
them. The starting point of this new aproach is represented by the
idea
that the decision to migrate is not an individual one, but rather
one made by a group, such
as families or households. The members of these groups act in
common, not only to
maximize their incomes, but also to minimize their risks and
eliminate the restrains that
come from the failures of national markets, not only of the labour
field
Stark and Bloom try to argue why there was need for a new
theoretical structure
in the attempt to explain international migration: research on the
economics of labor
migration has undergone an exciting and significant transformation
during the past few
years. At a theoretic level, migration research has expanded the
domain of variables that
seem to impinge upon and are affected by spatial labor supply
decisions; it has highlighted
the role of wider social entities and interactions within them in
conditioning migration
behavior; it has identified new linkages between migration as a
distinct labor market
phenomenon and other labor market and nonlabor market phenomena;
and it has
contributed to our understanding of the processes of economic
betterment and
development. At an empirical level, their work on the economics of
labor migration has
confirmed the usefulness of old and well-established models of
labor migration. It has also
provided better estimates of key-behavioral patterns, many of which
are important
ingredients in ongoing debates over public policies regarding
migration.
The neo-classical economics and the new economy of migration
approaches
differ from one another insofar as they posit contrasting sets of
interpretations regarding
return migration. When neo-classical economists argue that people
move permanently to
raise and maximize their wages in receiving countries, return
migration is viewed as a
failure, if not an anomaly. When the new economy of migration
contends that people move
on a temporary basis to achieve their goals or targets in receiving
countries, as a
prerequisite to returning home, return migration is viewed as a
success story, if not a
logical outcome. The new economy of migration theorists are adamant
about breaking
away from the neo-classical image of the failed returnee (Abreu,
2012: 48). The duration
of stay abroad is calculated with reference to the need of the
household, in terms of
insurance, purchasing power and savings. Once such needs are
fulfilled, return migration
occurs. In other words, the new economy of migration approach to
return migration goes
“beyond a response to negative wage differential” (Stark, 1991:
11).
When they are organized in households, the individuals have the
ability to control
the risks regarding their economic welfare, by dividing their
resources to various
destinations, in order to overcome economically difficult moments.
By doing so, some of
the family members can work in the local economy, while others
emigrate, hoping to
obtain income in a market that has nothing to do with the national
one, thus being shielded
from the risks that may apper in their country of origin .If such
risks
or economic problems appear, the household can rely on the
remitances sent by
immigrants in order to overcome difficult times. In the
economically developed countries,
the posibility of such risky situations to appear is being handled
by the insurance
companies or governmental programs, while in the poor countries
there are no such
institutional mecanisms to handle risks, or the small incomes of
each family do not allow
them to have private insurance, thus creating even more reasons to
migrate. Furthermore,
in the economically developed countries the credit systems are
efficient, allowing families
to obtain suplimentary incomes needed to fund various projects,
such as the aquisition of
new production technologies .On the other hand, in the
developing
countries, the credits are generally hardly accesed, or very
expensive. Therefore, in the
absence of efficient and accesible insurance and credit systems,
the market failures are
being perceived more intensely at an individual level, causing
increased social pressure,
and favouring external migration.
Dual Labor Market Theory of M. Piore ......
As a result of restrictions research of the neoclassical theory of
labor migration, developed the theory of
dual labor market according to which the international migration is
a result of labor market own requirements in modern
industrial society. According to this theory (Piore, 1979), the
international migration is caused by a stable demand for
immigrants’ work that is inherent in developed countries economic
structure. , immigration in countries of
origin is caused by such factors as low wages and high
unemployment, and opposite in host countries, where is a need
for foreign labor.
connected demand for immigrants’ work with four fundamental
characteristics of modern industrial
society: structural inflation, motivational problems, economic
dualism and labor demography.
The salary reflects not only of supply and demand conditions, it
also transfers the status and prestige, social
qualities. People consider that the salary has to reflect the
social status. If the employer seeks to attract unskilled
labor,
he cannot simply raise a salary, as it will break certain
communications between the social status and remuneration. If
the
salary at the lower level of hierarchy increases, there will be
pressure upon salary increase at other levels. The salary has
to be increased in all official hierarchy to hold them according to
their social expectations; this problem is known as
structural inflation. Involvement of local workers during shortage
of labor by salary increase is expensive and unprofitable
operation for the employer that compels it to search more
attractive decisions, such as import of migrants who are
ready
to work for lower wage.
The professional hierarchy is also important for motivation of
workers as people work not only for the sake of profit,
but also for accumulation and maintenance of the social status.
Sharp motivational issues arise at the lower layers of
official hierarchy because they have no high status, which needs to
be supported. This problem is inevitable and cannot
be eliminated, because it will always exist in the bottom of any
hierarchy. Employers need workers who consider the
lower level jobs as a means of earning money, for whom work is only
the income, without consequences for the status or
prestige. Those are immigrants, the majority from which aspires to
earn money for specific goals (to improve a state and
wellbeing of the house, construction of the house, payment for
school, purchase of land, acquisition of consumer goods).
Because of different living conditions in developed and developing
countries, the salary of the migrant by local standards
is sufficient though he understands that has the low status abroad.
Such migrants do not consider themselves as part of
the accepting society.
The splitting of labor market characterizes industrialized
countries, because of an inherent duality between labor
and capital. The capital is the fixed production factor whereas
work is a variable one: when demand falls, there is a
dismissal of workers. This dualism creates distinctions between
workers and conducts to bifurcation of labor. Skilled
workers in capital-intensive sector work with the best equipment
and tools. The employer is compelled to invest in these
workers by providing specialized preparation and education. Their
work is difficult and demands considerable knowledge
and experience. Because of high costs of workers in primary sector,
they are tried to be kept from leaving, in this context
their labor becomes the factor similar to the capita