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ATTRACTING SKILLED AND ANSKILLED IMMIGRANTS

Friday, June 30th, 2006

The immigration market approach can tell us much about the skill composition of the immigrant pool. The self-selected sample of immigrants may be dominated by relatively unskilled persons or it may be composed of persons who are highly skilled. The type of skill-sorting that occurs as people move to whichever country makes them the best offer is far from obvious. Nevertheless, it is one of the most important questions that must be addressed by policy makers; after all, the economic benefits of immigration clearly depend on it. The immigration of unskilled workers may allow U.S. manufacturers and fanners to fill menial jobs that require few skills with relatively low­ wage labor. By contrast, the immigration of skilled workers helps provide staff for universities, hospitals, and scientific laboratories. In addition, the immigration of the unskilled will have a different impact on native labor market conditions, on tax revenues, and on the costs of social programs than the immigration of the skilled.

While more careful study is required, it is useful to examine how income inequality in the country of origin affects the type of immigrant attracted by the United States. Consider two alternative source countries, one with a relatively egalitarian income distribution, such as Sweden, and one with a substantial amount of income inequality. Mexico.

Should highly skilled Swedes migrate to the United States? Because of its egalitarian income distribution, highly skilled Swedes do not earn much more than those less skilled. Therefore, highly skilled Swedes find that their earnings opportunities would increase substantially if they migrated to the United States. By the same token, unskilled Swedes find that their economy protects them from the poor labor market outcomes that would likely befall them if they were to migrate to the United States. The self-selection of the immigrant pool originating in Sweden, while small, tends to encourage the migration of skilled persons.

Should a highly skilled Mexican migrate to the United States? Mexico has substantially more income inequality than the United States. Skilled Mexicans find that the Mexican income structure greatly rewards those skills, while unskilled Mexicans have little protection from poor labor market outcomes. As long as they can afford to migrate, unskilled Mexicans have the most incentive to come to the United States, and skilled Mexicans the least; so Mexicans migrating to the United States are likely to be unskilled.

In the end, persons are matched with countries that reward specific skills they have to offer: this is the central implication of the immigration-market approach. As long as individuals migrate to take advantage of different economic opportunities among countries, there is no reason to presume that the United States will always attract the “best and the brightest” or to presume that the United States will be continually flooded with the least-skilled persons of the source countries.

The skill composition of the immigrants in the foreign­ born population in the United States thus depends on how our offer of economic opportunity compares to the offers made by other host countries and by the migrants’ home country. Immigrants originating in some source countries are likely to be substantially more skilled than immigrants originating in other countries. Changes in U.S. immigration policy as well as changes in economic conditions in the United States and in competing host and source countries will alter the composition of the immigrant flow. The competitiveness of the United States‘ offer in the immigration market, therefore, will largely determine the economic impact of immigration on the United States.

according to the article « Immigration and the economy » by By George J. Borjas (the journal «THE SENIOR ECONOMIST» )

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WHY CHOOSE TO MIGRATE?

Thursday, June 29th, 2006

Economists typically assume that individuals choose to behave in ways that maximize their well-being. In this context, immigrants strive to choose the country that offers them the best economic opportunities. There exists a close analogy between the immigration market and the job market. Like persons looking for work, potential migrants enter the market; receive offers from competing host countries and their home country, compare the offers, and make a migration decision.

The immigration market approach reveals the link between the components of the U.S. offer (including economic characteristics and the visa-allocation system dictated by the U.S. immigration policy) and the size of the immigrant flow entering the country. As economic conditions in the United States change (relative to those in other countries), different types of persons find it economically beneficial to migrate. Similarly, whenever Congress changes important aspects of immigration policy, immigration costs are altered for many potential migrants, and a different immigrant flow enters the United States. To assess the benefits and the costs of alternative immigration policies, therefore, it is necessary to determine how key components of America’s offer in the immigration market affect the incentives of potential migrants.

If we assume that individuals move in response to better economic opportunities, it is evident that differences in average income levels among countries are a prime determinant of the size and direction of immigrant flows. Immigrants tend to gravitate from low-income countries to high-income countries. Further, the greater the income differential between the countries, the larger the size of the population flow. For instance, the wage differential between Mexico and the United States is the largest income gap between any two contiguous countries in the world. It is not surprising, therefore, that large migration flows originate in Mexico and move toward the United States, instead of the other way around.

according to the article « Immigration and the economy » by By George J. Borjas (the journal «THE SENIOR ECONOMIST» )

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THE NATURE OF THE IMMIGRATION MARKET

Wednesday, June 28th, 2006

There are three sets of players in the immigration market: the people contemplating whether to leave their home countries, the governments of immigrants’ home countries, and the governments of the potential host countries. All these players enter the immigration market with different objectives, and it is the interaction among them that leads to a particular sorting among the various countries.
Individuals make the immigration decision by comparing the values of the various alternatives. By considering the financial and legal constraints regulating international migration, they choose the country likely to make them best off. These constraints include individual financial resources. After all, international migration is costly. The costs include direct expenditures, such as out-of-pocket expenses associated with transportation of immigrants and their families to their new homes, and they include indirect costs, such as the income losses associated with spells of unemployment that occur as immigrants look for work in the new country. Because only persons, who have accumulated sufficient wealth and savings, can afford to migrate. the potential migrants’ financial resources obviously influence the immigration decision.
Potential host countries also are important players in the immigration market, for they can encourage, discourage, or prevent the entry of certain groups of persons. In particular, potential host countries are characterized by specific sets of economic opportunities described by existing income distribution, whereby certain types of skills are highly rewarded and others are not; whereby jobs are easily available in some industries but scarce in others; whereby some occupations are in high demand, but high levels of unemployment persist others; whereby persons who experience relatively poor labor market outcomes are subsidized by the welfare state, while persons who experience favorable outcomes are heavily taxed. These differences in income and employment opportunities by skill, industry, and occupation imply that the attractiveness of the economic “offer” made by a host country will vary among migrants.
Host countries also regulate the size and composition of the immigration flow by imposing restrictions on entry according to the potential migrant’s skills, wealth, occupation, political background, moral rectitude, national origin or family relationships with current residents. For example, current U.S. immigration policy makes immigration costs almost prohibitive for persons who do not already have relatives residing here. Other countries, such as Canada and Australia, have a point system in which potential immigrants are screened and graded on the basis of their educational attainment, age, occupation, and other characteristics. Thus, through their immigration policies and their offers of economic opportunities, host countries compete for the human and physical capital of the potential migrants.
The home countries of potential immigrants are the last major players in the immigration market. Their economies also provide a certain set of income and employment opportunities to their residents, and their immigration policies regulate the size and skill composition of the out-going flow. In some countries, like the United States, citizens are free to leave the country whenever they wish, for any duration, and for whatever reason. In other countries, immigration statutes impose large costs and penalties on potential immigrants and make it very difficult for residents to migrate elsewhere. Moreover, such restrictions often control not only the size but also the composition of the immigration flow. For example, the Soviet Union long prevented the exit of any person who worked in sensitive government jobs, and Cuba prohibited the exit of persons in the age group subject to military service.
 according to the article « Immigration and the economy » by By George J. Borjas (the journal «THE SENIOR ECONOMIST» ) 

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WHAT DO MARKETS DO?

Tuesday, June 27th, 2006

Markets are institutions that regulate transactions among individuals. In some markets, goods such as bicycles or cars are exchanged between buyer and seller. A free-enterprise economy uses prices to allocate the scarce goods among the many persons wishing to own them. Only those persons, willing and able to pay the going price, get the goods. Other markets, such as the labor market, guide the allocation of labor among different firms. In these markets transactions involve the exchange of monetary compensation from buyer to seller of the good being purchased.
All markets share two features. They provide the rules of the game in which exchanges are made, and they determine, through the interaction of players in the marketplace, a certain allocation of the scarce resources among competing users. In other words, only a subset of persons will own the limited number of bicycles: and firms and employees will be “married” in a particular sorting of workers to jobs.
There also exists an immigration market, one that allocates persons wishing to leave their current countries of residence among the few countries willing to admit them. Potential migrants, like workers looking for a job, are looking for the best country they can live in. Host countries, like firms looking for specific types of workers, set immigration policies so that they can attract specific types of migrants. Just as the labor market guides the allocation of workers to firms, the immigration market guides the allocation of persons to countries.
The existence of an immigration market implies that countries compete for the physical and human capital of immigrants, that the particular sorting of persons and countries depends on how the offers to potential immigrants differ among the competing countries, and that there will be winners and losers in this competition. Changes in immigration policies alter the flow of immigrants to particular countries.
 according to the article « Immigration and the economy » by By George J. Borjas (the journal «THE SENIOR ECONOMIST» ) 

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AN ECONOMIC PERSPECTIVE ON IMMIGRATION

Tuesday, June 27th, 2006

How might an economic perspective on immigration help us understand the issues at stake? The answer follows from a crucial hypothesis. It is that immigrants choose to come to the United States. The immigrant flow is composed of the pool of persons who are attracted by the earnings, employment, and welfare opportunities provided by the American economy, which are willing to incur costs associated with immigration, and who are able to gain entry into the country. Persons migrating are “self-selected.” They are not “average” in the country from which they come.
In a sense, the United States competes with other countries, such as the home countries of migrants and other potential host countries, for the immigrants’ human and physical capital. International trade involves not only the movement of goods and services among countries but also the movement of people.
Just as nations compete in a worldwide market in which goods and services are exchanged, they also compete in an immigration market. By presenting a specific set of economic opportunities and by pursuing an immigration policy that prevents the entry of some persons but encourages the entry of others, the United States makes a particular type of “offer” in the immigration market. The attractiveness of the offer, relative to the offers of other countries, determines the size and composition of the immigrant flow entering the United States. This perspective on the study of immigration yields a number of new insights that can play a central role in the ongoing debate about immigration policy.
 according to the article « Immigration and the economy » by By George J. Borjas (the journal «THE SENIOR ECONOMIST» ) 

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THE DEBATE OVER RESTRICTIONS

Tuesday, June 27th, 2006

Despite the fact that almost all Americans are immigrants or descendants of immigrants, American history is characterized by a never-ending debate over when to pull the ladder in. The debate over how many and which kinds of immigrants to admit has been and remains heated and is often tainted with racial (if not racist) overtones.
Two arguments are typically used to justify immigration restrictions. The first is that immigrants have an adverse impact on the earnings and employment opportunities of native-born Americans. The People’s Party platform of 1882, representing the populist movement of that era, stated. “Wу condemn . . . the present system, which opens up our ports to the pauper and criminal classes of the world, and crowds out our wage earners.” It may seem that little has changed in the last hundred years, since the same accusations are hurled today at illegal aliens, at boat people originating in Southeast Asia and Cuba, and at other unskilled immigrants.
Second, it is argued that immigrants find it hard to adapt or assimilate in the United States because of their very different cultural, political, or economic backgrounds. This view, in turn, raises fears that a large number of unassimilated immigrants will splinter the country’s national identity.
It may well be that these are valid hypotheses. Proponents of these views, however, often base their arguments more on perceptions or ad hoc theorizing than on solid empirical evidence. Surprising as it may seem, until very recently, virtually no systematic empirical research had been carried out to clarify the issues at the core of the debate over immigration policy.
The modem view of the immigrant experience differs from the earlier, racially tainted portrait by containing both and unfavorable impressions of the Immigrant. Among the axioms of the current conventional wisdom are the following:
• Immigrants have a significant adverse impact on the earnings and employment opportunities of the native-born. By crowding out natives from the labor market, immigrants take jobs away from natives.
• Legal immigrants are, on average, highly skilled and hardworking people and tend to be relatively successful in the labor market.
• There may be as many as 10 million illegal aliens in the U.S. They tend to be single men working in agricultural jobs, and they have an adverse impact on the labor market opportunities of less skilled natives.
• Current U.S. immigration policy is a ticking population time bomb. By allowing current immigrants to sponsor the entry of their relatives, who in turn can sponsor the entry of additional relatives, practically everyone in the world could qualify for entry into the United States.
These impressions about the immigrant experience are widespread. They are also false.
 according to the article « Immigration and the economy » by By George J. Borjas (the journal «THE SENIOR ECONOMIST» )

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IMMIGRATION AND THE ECONOMY

Tuesday, June 27th, 2006

The United States has been populated by peoples from many different national origins, races, religions, cultures, and languages. Over 50 million people chose to immigrate to the United States between 1820 and 1987. These immigrants believed that the United States offered better opportunities for them and their children than did their countries of origin. In an important sense, the American experience is the story of how these very different peoples, united by their search for a better life, built a country. 

To build a country means to build an economy that is why I think it’s very important to analyze the impact of immigration on American economy, the biggest in the world. So, I would like to create a new category, where I will tell you about immigration and the economy. 

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THE SURVEY OF THE INDUSTRIES AND THE LARGEST BELARUSIAN ENTERPRISES (ending)

Monday, June 26th, 2006

Belarus Computer Industry  

The Research and Development of the component base and architecture of the Belarusian computers was done in a Minsk based Research Institute of Computational Techniques. Nowadays the scientific research association “Cybernetics” of the Academy of Sciences of Belarus is probably dealing with these problems. The computers are assembled also in Minsk in BelABM, the main Belarusian PC and main frame computer manufacturer.  

BelABM is now the partner with Compaq and Fujitsu. It manufactures LANs and PCs. BelABM also is the partner with GlobalOne in telecommunications.  

Laser and Optical Industry of Belarus Let’s just list below the major Belarusian optical enterprises: Lida Optical Plant “Optik” is the second largest optical plant in Europe after Carl Zeiss. In the former Soviet Union it was specifically designed as a mass manufacturer of optical elements. Optical elements such as lenses, prisms, flats, etc., are manufactured here. The idea was that the plant would concentrate on optics while further optic-mechanical enterprises would use its product to assemble objectives and other optic-mechanical devices. The plant is capable of mass production of millions and millions of optical elements. Lately they also started to pool optical fibber, do optical coatings, including photo chromic coats. All major optical plants of the former Soviet Union were the customers of this giant.  

Basically, if you are looking for a cheap supplier of big quantities (millions) of high quality glass and quartz optical elements - Lida “Optik” could be the way to go.  

BelOMO is a major optic-mechanical assembly plant of the former USSR and Belarus now. It is the designer and manufacturer of laser, optoelectronic and optic mechanical instruments. Products include topographic and multispectral photographic equipment, photogrammetric devices, laser devices, optoelectronic sighting devices, and medical equipment based on laser systems. It was set up as a manufacturer of high resolution satellite cameras and is still listed in various space war lists. So there are rather high standards of quality here. As far as peaceful applications, it manufactures objectives, photo cameras, etc. Some of the satellite photos of Russian Sovinformsputnik were done on BelOMOs TK-350 satellite topographic camera with 10 meter ground resolution. The enterprise cooperates with Swedish Latronix. German CARL ZEISS has a joint venture with Smarhon Optical Machine Tool Plant. This plant was the SINGLE supplier of ALL optical plants of the former USSR with optical polishing equipment. They also manufacture industrial vacuum measurement sensors/ electronics.  

Minsk Laser Plant. This is an experimental plant that is manufacturing YAG lasers, laser power supplies, and solid state pumped dye lasers with harmonics generators. Established in 1991, manufacturer of laser rods and laser crystals including alexandrite, Ti-sapphire, forsterite and lanthanum beryllate. Their products could be pretty cool. Other Belarusian institutions related to optics/ lasers are the Institute of Applied Physical Problems, the National Academy of Sciences, the Institute of Applied Optics of National Academy of Sciences, “October” Glass Factory, “Optron” Instrument Manufacturing Plant. Generally, Belarusian Laser and Spectroscopy school is pretty strong.  

Horizont. The TV-production Corporation HORIZONT (Minsk) has more than 40 years of experience in the market. Currently they manufacture color TV-sets; modern equipment for cable and satellite television; office furniture. The company has its own considerable production facilities and qualified personnel for the assembling of modern consumer electronics. HORIZONT Corporation is a state enterprise, including 5 plants and the Design-Centre. They cooperate with such known companies as Philips Semiconductor; Samsung Electronics Co., Ltd.; Siemens AG; Thomson, and many others. The main reasons why it’s good to deal with HORIZONT are the following: - no customs borders with Russia - the location in the centre of Europe - the permission to found a free economic zone on the base of HORIZONT (release from taxes applies to the partners as well) - the availability of the vacant production capacities and qualified personnel - the availability of the Design-Centre – the prospective designer of the future projects. 

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THE SURVEY OF THE INDUSTRIES AND THE LARGEST BELARUSIAN ENTERPRISES (part 2)

Sunday, June 25th, 2006

Chemical Industry of Belarus: Belarus has perhaps the most modernized and powerful chemical industry among the CIS states besides Russia. The chemical industry specializes first of all in the processing of Russian oil products going through the pipelines to the west (primarily Germany); synthetic polymers, mineral fertilizers, pharmaceutics, household chemical products.  

Polymer Synthesis in Belarus: Several major Belarusian enterprises are manufacturing polymers, synthetic fibers, polymer film etc. Among such enterprises are “Khimvalakno” (synthetic polyester fibre plant in Grodno); Rudensk plastic manufacturing plant near Miensk; ZIV - Mahilyow Viscose Fibre Plant and “Khimplast” (plastics and polymer manufacturer/ recycler plant) and Mogilev Regenerate Plant (recycling plastic materials).  

Production of Mineral Fertilizers in Belarus: Belarus is the world biggest supplier of potassium mineral fertilizers - the only mineral resource met in abundance in our land. “BelarusKali” is the world’s largest potassium fertilizer manufacturer; “Azot” is a giant enterprise manufacturing nitro-mineral fertilizers and other nitro compounds. It is now a part of the Belarusian Consortium which includes also Khimvolokno, Polymir etc.  

Belarusian Pharmaceutical Industry: it turns out that Belarusian pharmaceutical industry is not so bad. Some foreigners buy antibiotics in packs when in Belarus. Keep in mind that extremely strict former USSR governmental standards on medicine are still operating. Of course, with the disintegration of the industrial network of the CIS the production has fallen and there is a deficit of medicine now in Belarus. Major enterprises are Mogilev plant of medicine and Mogilev plant of veterinary medicine.  

Household Chemical Products from Belarus: there are several plants involved in production of stuff like shampoo, detergents, etc. for example, Brest Chemical Plant of Household Products.  

The Belarusian Semiconductor Industry - one of the main branches of Belarusian economy. During the USSR times Belarus semiconductor industry was taking care of the mass manufacturing of main-stream semiconductor elements, ICs and computer chips. Belarusian enterprises were mostly oriented on consumer electronics and mid-level ICs. The main Belarusian semiconductor consortium - Research and Production Corporation “Integral” - is in fact the largest in Eastern Europe semiconductor Production Company. In fact it consists of 6 plants and 3 design centers providing complete cycle of production of electronic components. The headquarters of “Integral” are located in Dzerzhinsky Plant. “INTEGRAL” Research and Production Corporation was established in 1971 in Minsk, it was the biggest semiconductor manufacturer in the former USSR, both for national economy and for defense needs.  

At present time the Corporation includes five plants and four R&D centers in different regions of the Republic of Belarus. Under new political and economical conditions, “Integral ” make active efforts for conversion and diversification of the range of their products. By extending and updating the new high technology goods of its own design, “Integral” wants to be useful for its customers and tries to solve the difficult problems of keeping its competitiveness, to gain the access to new markets and receive international recognition.  

Production Association RADIOVOLNA concentrates main attention on production of complicated radio electronic devices and electro technical goods for automobile industry. At present time the association enlarges sale markets of car stereo systems, TV sets, radio receivers generators and accessories for diesel engines, electro technical goods for agriculture and cable TV equipment, aspires to be useful to customers constantly producing now qualitative goods.  

Production association RADIOVOLNA has wide opportunities in: 

- Forming production; 

- Mechanical treatment 

- Plastic processing 

- Electroplating and paint coating 

- Production of complicated technological and non-standard equipment on CHARMILLES TECHNOLOGIES machines.  

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THE SURVEY OF THE INDUSTRIES AND THE LARGEST BELARUSIAN ENTERPRISES

Saturday, June 24th, 2006

Belarus Auto Moto Industry. The BELAZ Trade Corporation (BTC) groups of companies have complete range of products and original services; they are the worldwide supplier of haul trucks, road construction machinery, service vehicles & other haulage equipment with the BELAZ trademark. When Belarusians think of something they have accomplished in industry most likely they think about their auto industry, and primarily Minsk Automobile Plant - MAZ.

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Indeed we could be proud of the machines that are working in all corners of the former USSR - deserts of Middle Asia, polar tundra, Siberian taiga, quarries of the Urals and many countries of the world. German businesses are cooperating with MAZ. Ford has already built a plant in Belarus acknowledging our successes in automobile manufacturing. Czech “Skoda” followed them. Great Britain is considering Belarus as a partner for future cooperation, too.
The Production Association “Minsk Tractor Works”, MTZ, is one of the largest manufacturers of tractors in the world. MTZ Belarus is an association of 6 cooperating Belarusian plants. MTZ Belarus has received 32 international quality certificates. More than 3 Millions of MTZ Belarus tractors successfully operate in over 100 countries around the world all year round in various climate and soil conditions.
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Currently MTZ manufactures:
-24 different models of ploughing tractors ranging from 50 to 130 h.p.;
- 6 models of small tractors with engine power from 20 to 35 h.p.;
- 8 models of mini-tractors and moto-blocks with engine power ranging from 6 to 12 h.p.;
- 16 models of loaders, forestry, mine and maintenance machines;
- spare parts for the tractors;
- metal processing equipment and other stuff.
  
Gomselmash is one of the largest producers of agricultural machinery in the CIS and Eastern Europe. Gomselmash manufactures fodder -picking combines and multi-functional agricultural machines: mowing machines, machinery complexes for sugar-beet cultivation, tractor trailers, mini-tractors with optional attachments and automobile components.
With metallurgical and preparatory technology, mechanical assembly and instrument production capacity, the largest network of warehouses, their own means of transportation, and the well-qualified staff, Gomselmash is able to undertake a wide range of technical production orders. It is currently seeking new partners interested in investing in joint ventures. Gomselmash is prepared to consider proposals within their field of expertise.
Oil Processing Industry of Belarus: Belarus oil-refining industry changes its structure and proprietorship. From the Belarusian press talks, speeding up privatization in this industry has begun to assume a specific shape. Some governmental structures are working out share-distribution projects for about six major players in the Belarusian oil-refining industry. First, there are companies such as Polimir, Naftan and the 2nd Heat and Power Plant, all of which are situated in northern Belarus. Then there is a Belshina tyre-factory in Bobruisk; Azot in Grodno, they are the biggest producers of caprolactam and mineral fertilizers; and similar plants in Mogilev and Svetlogorsk, which go by the name of Khimvolokno. The two major oil processing plants are in Navapolacak and in Rechitsa. These are relatively modern giants that are currently operating below their full capability because of the drop of oil supplies. Other few names related to this industry are Slavneft (Oil & Gas); Rechitsa Oil Processing plant and Babrujsk Hydrolisys Factory. Navapolacak oil processing plant “Naftan” is the biggest oil processing plant in Europe. Lukoil plans to be a biggest shareholder in Naftan.
 

 

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