Wendy A Stock PowerPoint Prepared by Z Pan Chapter 12 Immigration and the International Trade of Labor Copyright 2013 John Wiley amp Sons Inc Photo Credit OMAR TORRESAFP GettyImages ID: 490797
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Introduction to Economics: Social Issues and Economic ThinkingWendy A. StockPowerPoint Prepared by Z. Pan
Chapter 12
Immigration and the International Trade of Labor
Copyright © 2013 John Wiley & Sons, Inc
. / Photo Credit: OMAR TORRES/AFP/
GettyImages
, Inc.Slide2
Describe the extent of international migrationAssess the costs and benefits of migration for migrantsAssess
the costs and benefits of migration for host and home countriesDefine and describe the extent of outsourcing and offshoringCopyright © 2013 John Wiley & Sons, Inc.
2After studying this chapter, you should be able to:Slide3
An Immigrant is someone who migrates into a host country. An Emigrant
is someone who migrates out of their home country.Copyright © 2013 John Wiley & Sons, Inc.
3Immigrant and emigrantSlide4
Copyright © 2013 John Wiley & Sons, Inc.4International Migrants as a Percentage of the PopulationSlide5
Copyright © 2013 John Wiley & Sons, Inc.5U.S. Immigrant Population by State 2010Slide6
Monetary costs and benefits:the differences in earnings and cost of living across locations,
the cost of flying or driving to the host locationthe cost of moving belongings.
Nonmonetary costs and benefits: changes in the distance from family and friends changes in recreation and leisure
opportunities
changes in
language, cultural, and governmental
differences
Copyright © 2013 John Wiley & Sons, Inc.
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Costs and Benefits for ImmigrantsSlide7
Improvement in earnings opportunities attract immigrants Higher monetary or other costs of moving reduce immigration
People who are financially secure and have more labor skills are more likely to migrate than others Younger individuals are more likely to migrate than older individuals
Copyright © 2013 John Wiley & Sons, Inc.7Determinants of ImmigrationSlide8
Copyright © 2013 John Wiley & Sons, Inc.8Impacts of Immigration on Host Country Labor MarketsSlide9
Copyright © 2013 John Wiley & Sons, Inc.9Impacts of Immigration on Host Country Labor MarketsSlide10
The impact of immigrants on local labor markets depends on whether immigrants are complements or substitutes for native workers, which in turn depends on the level of training and skills that immigrants bring
to the labor market.Copyright © 2013 John Wiley & Sons, Inc.10
Importance of Immigrants’ Skills Slide11
Copyright © 2013 John Wiley & Sons, Inc.11Skill levels of Immigrant Population in the U.S.Slide12
Immigration has impacts on product markets in both host and home countries because changes in the size of a population generate changes in the demand for goods and services.
e.g. U.S. tortilla sales revenue grew from $300 million to over $1.5 billion per year between 1980 and 1990Copyright © 2013 John Wiley & Sons, Inc.
12Impacts of Immigration on Product MarketsSlide13
Costs – Pressure on host country resources: (public schools, roads, other government services)Benefits – Contribution immigrants generate (including tax revenue)The National Research Council estimated that over
the course of a lifetime, the average U.S. immigrant pays about $115,000 more in taxes (in 2011 dollars) than he uses in public resourcesCopyright © 2013 John Wiley & Sons, Inc.
13Impacts of Immigration on Host Country ResourcesSlide14
Copyright © 2013 John Wiley & Sons, Inc.14The Impact of Emigration on Home Country Labor MarketsSlide15
Remittances are transfers of money to home countries by workers who have emigrated.Remittances are an important source of income
for emigrants family members in many developing countriesRemittances generate increases in the demand for normal goods and services in
the home country.Copyright © 2013 John Wiley & Sons, Inc.15RemittancesSlide16
Outsourcing occurs when someone hires another person or firm to produce a good or service.
Offshoring is the movement of a firm’s production from one country to another.Controversy surrounding outsourcing arises
because the distribution of the costs and benefits of outsourcing are not equally shared.Copyright © 2013 John Wiley & Sons, Inc.
16
OUTSOURCING AND OFFSHORING AS
INTERNATIONAL TRADE
IN LABORSlide17
Copyright © 2013 John Wiley & Sons, Inc.17The Impact of Outsourcing on Home Country Labor MarketsSlide18
Copyright © 2013 John Wiley & Sons, Inc.18The Impact of Outsourcing on Home Country Product MarketsSlide19
Questions/DiscussionsCopyright © 2013 John Wiley & Sons, Inc.19In a recent speech, a U.S. government
official stated, “The physical distance along a great circle from Wausau, Wisconsin to Wuhan, China is fixed at 7,020 miles . . . [However] One of the defining characteristics of the world in which we now live is that, by most economically relevant measures, distances are shrinking rapidly. . . .” How will the “shrinking distance
” between the U.S. and China affect labor markets in the U.S.? Assume that wages for accountants are lower in China than in the United States. Does this mean that accounting jobs in the United States will be lost to China? Explain.Slide20
Copyright © 2013 John Wiley & Sons, Inc.20Key Concepts
ImmigrantEmigrantOutsourcingHost countryHome countryOffshoring