Migration is a headline issue with growing political and economic impact. While there is a rich theoretical and historical literature on international migration, econometric analyses are less common. A joint CEPR workshop with the Universität Konstanz on 26/27 February on `The Economics of International Migration: Econometric Evidence' brought together leading researchers in this field. The workshop was organized by Wolfgang Franz, Professor of Economics at the Universität Konstanz and Research Fellow in CEPR's Human Resources programme, and Klaus F Zimmermann, Director of the Seminar for Labor and Population Economics and Professor of Economics at the Universität München and Co-Director of CEPR's Human Resources programme. Financial support was provided by a SPES grant from the Commission of the European Communities to CEPR and by the Sonderforschungsbereich 178 `Internationalisierung der Wirtschaft' (research programme on `Internationalization of the Economy') at Konstanz. The papers presented considered three major areas: the impact of language abilities on immigrants' employment and earnings opportunities, the impact of immigration on the economy of the host country, and methodological issues.

In the first paper, `Speaking Fluency, Writing Fluency and Earnings of Migrants', Christian Dustmann (Universität Bielefeld and CEPR) analysed the determinants of migrant workers' language abilities and the impact of language proficiency on their earnings position. From an empirical analysis based on panel data for West Germany, he found that education had a greater effect on writing fluency than on speaking fluency, while language proficiency is an important determinant of migrant workers' earnings positions. Jörn-Steffen Pischke (Zentrum für Europäische Wirtschaftsforschung, Mannheim) pointed out that other waves of the panel data gave different results for the effects on earnings, while the data on fluency may also be unreliable since they depend on self-assessment. Barry Chiswick (University of Illinois, Chicago) suggested that having children may play a role in acquiring knowledge of the language.

In his paper, `Learning Hebrew and Finding a Job: Econometric Analysis of Immigrant Absorption in Israel', Michael Beenstock (Hebrew University of Jerusalem) used Israeli panel data on immigrants' language abilities and employment histories to investigate the interdependence of employment absorption and language absorption. He found that employment promotes Hebrew proficiency, especially spoken, but this in turn promotes employment absorption. Migrants therefore face a strategic trade-off on entry between attendance at language school and finding a job.

Rudolf Winter-Ebmer (Universität Linz and CEPR) suggested that the paper contained no clear testable theoretical hypotheses and expressed concern about the measure of occupational convergence used. George Borjas (University of California, San Diego) identified the acquisition of language ability with investment in human capital.

In `The Endogeneity Between Language and Earnings: An International Analysis', Barry Chiswick and Paul Miller (University of Western Australia) focused on the determinants of dominant language fluency, its effects on earnings and its endogeneity with immigrants' earnings. They modelled dominant language fluency as a function of exposure to the language, efficiency in acquiring the second language and economic benefits from language fluency. In their empirical work they compared analyses for Australia, the US and Canada and found all three variables significant and their model very robust.

Christoph Schmidt (Universität München and CEPR) stressed the need for strong assumptions about the nature of the labour market to interpret reduced forms in a structural model and also noted that the chosen measure of `language ability' was based on self-assessments with a danger of overestimation. Francisco Rivera-Batiz (Columbia University) emphasized the role of diminishing returns to learning, while Victor Steiner (Zentrum für Europäische Wirtschaftsforschung, Mannheim) attributed the low coefficient on the experience variable to its measurement of experience in home countries.

In their paper, `Analysis of Remigrant Behaviour Using Time-discrete Non-parametric Survival Analysis', Beatrix Brecht and Siegfried Heiler (Universität Konstanz) considered the behaviour of guest workers in Germany, but their principal focus was on methodological issues. They elaborated on time-discrete non-parametric survival analysis using an extended KaplanMeier estimation to investigate the propensities of migrants from Spain, Greece, Italy, Turkey and Yugoslavia to return home during 1984-90. Victor Steiner suggested using life-table estimations as an alternative and expressed scepticism about the reliability of the results, since only some 2.5% of guest workers remigrated in the second half of the 1980s. Discussion concentrated on technical issues, but Wolfgang Franz noted the economic importance of differences in remigration behaviour between Turkish males and females.

In `The Analysis of Destination Choice in Hedonic Migration Models', Angelika Eymann and Gerd Ronning (Universität Konstanz) concentrated specifically on the migration behaviour of elderly households in West Germany, for whom employment is a negligible motivation. They considered this migration as the outcome of the rational decision of individuals who adapt their pattern of consumption activities to anticipated or unanticipated changes in their socioeconomic states. Juan Dolado (Banco de España and CEPR) questioned whether elderly people live in inappropriate housing, and if so whether this is due to the large transaction costs in moving. He also wondered if the life-cycle theory could serve as a theoretical starting-point and whether (older) movers are constrained by illiquidity. The authors replied that empirical evidence suggested that the main reason the elderly move is to change their type of accommodation.
In their paper, `Immigration and Growth in the Host Country: Evidence from Pooled Country Data', Juan Dolado, Alessandra Goria (Fondazione Enrico Mattei, Milan) and Andrea Ichino (Innocenzo Gasparini Institute for Economic Research, Milan, and Fondazione Enrico Mattei) first provided descriptive evidence to suggest that migrants' human capital may be quite high and similar to that of natives. Their econometric analysis was based on a Solow growth model augmented by migration and then extended to include two types of capital. They found that immigration represents a source of population growth but cannot be assumed to have the same negative quantitative effects on output and growth per capita as a natural increase in native population. They attributed the difference to the stock of human capital that immigrants bring into the host country on entry.

Andreas Wörgötter (Institut für Höhere Studien, Wien, and CEPR) objected that the authors had neglected the important effects of migration on age structure as well as regional aspects and an endogenous treatment of technical progress. Tim Hatton (University of Essex and CEPR) expressed concern that the authors' model took no account of capital mobility.

In their paper, `Back to the Past and Forward to the Future', Ursula Oser and Peter Winker (Universität Konstanz) and Wolfgang Franz used a macroeconometric disequilibrium model to evaluate the macroeconomic effects of migration into Germany. Germany has had considerable experience of immigration: there was a tremendous inflow of guest workers in the 1960s, and there is currently a high inflow from Central and Eastern Europe. The authors' simulations indicated that migration's effects on the economy are `regime-specific', i.e. dependent on the type of disequilibrium prevailing on the goods and labour markets. Michael Burda (INSEAD and CEPR) welcomed the authors' macroeconometric approach but questioned their treatment of structural unemployment. He urged them to extend the model to take account of heterogeneous labour and explicit matching functions. Michael Beenstock suggested conducting more detailed analyses of long-run effects and including the housing market.

In `Workers' Remittances, the Real Exchange Rate and Macroeconomic Policy: A Quantitative Framework', Riccardo Faini (Università degli Studi di Brescia, Innocenzo Gasparini Institute for Economic Research, Milan, and CEPR) developed a simple model in which migrants' utility is a function of their own and their families' consumption to estimate aggregate remittance functions for Greece, Morocco, Tunisia and Turkey. His results showed that the real exchange rate plays a critical role in determining the steady-state value of remittances. His macroeconomic simulations for the Philippines also demonstrated the significant effects of remittances on the economy's response to different monetary and exchange rate policies and hence the need to consider remittances in the design of macroeconomic adjustment programmes. Werner Smolny (Universität Konstanz) argued that there are more illuminating ways of demonstrating the importance of remittances and doubted the reliability of several of Faini's estimates. Angelika Eymann suggested devoting more attention to economic conditions in both host and sending countries.

In `Migration and Macroeconomic Stability in a Monetary Union', John Ermisch (University of Glasgow and CEPR) and Anton Muscatelli (University of Glasgow) analysed a two-country theoretical model in which migration responds primarily to relative unemployment rates, and wages and employment are determined by union-employer wage bargaining in both countries. They used this model to estimate dynamic equations for migration between the Republic of Ireland and Great Britain during 1955-77 and to explore the operation of stabilization policies. Andreas Wörgötter asked for further details of the monetary union, while Michael Burda and Tim Hatton questioned details of the underlying model of wage determination.

In his paper, `Immigrant Skills and Ethnic Spillovers', George Borjas investigated the spillover effects of ethnicity on human capital accumulation in the US. He investigated whether the elasticity of child quality with respect to parental inputs varies across ethnic groups and whether the role of ethnic spillovers differs with parental skill levels. He also found that the influence of ethnic spillovers on human capital accumulation is as strong for immigrants' children as for their grandchildren. Francisco Rivera-Batiz questioned whether there was enough variability in all the explanatory variables to provide reliable estimates. He also criticized the specification of wages and suggested refining their measurement by breaking down into occupational and educational levels. Ira Gang (Rutgers University) noted that heterogeneity within groups might exceed that across groups.

In their paper, `The Effects of Immigration on European Residents: An Econometric Analysis', Ira Gang and Francisco Rivera-Batiz examined the impact of various types of immigrants on the income of various groups of native workers in Europe. Using a model with education, experience and unskilled labour, they found that education is complementary with unskilled labour and experience, while experience itself is a substitute for unskilled labour. Their simulations indicated that unskilled migrants reduce the wages of natives with little education while highly educated migrants raise the wages of unskilled natives, but both effects are very small.

Anton Muscatelli questioned whether their estimation procedure controlled adequately for cyclical factors and stressed the importance of migration's macroeconomic effects on employment. Barry Chiswick argued that the estimated equation did not take proper account of the openness of the regions and might therefore be misspecified. Michael Burda suggested that the disturbance term in the wage equation may capture unmeasured ability that varies across regions.

In `Native Wage Impacts of Foreign Labor: A Panel Analysis', John DeNew (Universität München) and Klaus F Zimmermann investigated the impact of foreign labour on native wages in Germany in a framework in which low-quality workers (natives and immigrants) and high-quality workers (natives only) are complements. They found that foreigners had no significant effect on the wages of low- or high-skilled Germans.

Cormac <209> Gráda (University College Dublin and CEPR) emphasized that the causation between wages and migration runs in both directions, so the reduced forms in the authors' study might be too static and partial. John Ermisch suggested weighting the number of migrants in the wage equation by duration of stay to take account of possible heterogeneity.

Cormac <209> Gráda and Brendan Walsh (University College Dublin) closed the workshop with `Irish Emigration: A Survey of Research Findings'. They reviewed the history of emigration from Ireland since the mid-nineteenth century by considering the size of flows, the destinations of migrants and their distribution by age, sex, social and educational background. They also considered the relationship of emigration to internal migration, its role in upgrading the occupational mix of the remaining labour force and promoting urbanization and income convergence with the UK. Andreas Wörgötter stressed the role of a threshold variable in the migration decision. Michael Beenstock questioned whether the authors' wage equation really showed the type of convergence they claimed.

A selection of the papers presented at this conference will appear in a Special Issue of the Journal of Population Economics in early 1994.