Date:
Location:
Today's Speaker
Benjamin Olken (MIT), "Emigration During Turbulent Times"(joint with Kaicheng Luo and David Yang)
Abstract
Migration to another country is one approach to avoiding risks from political turmoil, but many more people stay behind than leave. In part, this may be because the economic costs of uprooting families or businesses are large. We explore the economic calculus behind migration during times of political turmoil through two major episodes in China over the past century: movement from Shanghai to Hong Kong in advance of the possible Communist takeover in the 1940s, and exit from Hong Kong in more recent years as the mainland government increased political control over the city. In each case, we document the extent to which exit decisions are responsive to (i) wealth shocks, as measured by differential real estate appreciation, and (ii) changes in the differential "price'' of moving vs. staying put, using quasi-random destruction of businesses by errant bombs in historical Shanghai and Bartik-type unemployment shocks in contemporary Hong Kong. In both episodes, we document a large, positive wealth elasticity of migration and a negative relative price elasticity. Importantly, in both cases, people became more elastic, not less, when the perception of political turbulence became salient. Economic incentives play an important role in shaping migration decisions even during highly politically uncertain times.
Co-sponsored by FAS and IQSS, the Alberto Alesina Seminar on Political Economy supports research-related activities that integrate the study of economics and politics, whether by studying economic behavior in the political process or political behavior in the marketplace. In general, positive political economy is concerned with showing how observed differences among institutions affect political and economic outcomes in various social, economic, and political systems and how the institutions themselves change and develop in response to individual and collective beliefs, preferences, and strategies.
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All interested faculty and students are invited to attend.