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International Migration: An Application of the Urban Location Choice Model

Published online by Cambridge University Press:  13 June 2011

Norman Carruthers  and
Aidan R. Vining
Norman Carruthers
Affiliation:
University of British Columbia
Aidan R. Vining
Affiliation:
University of British Columbia
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Abstract

The public choice model of urban residential location offers an opportunity to integrate economic and political models of migration, and thus has broad applicability as a positive model of both individual behavior and national policies relating to international migration. The authors describe the basic economic model of the urban migration process and explore its dynamics. They utilize this model to explain the migratory behavior of individuals and groups and the reactions of national governments, whether “sending” or “receiving” the migrants. Finally, they examine the policy implications of such a model.

Type
Research Article
Information
World Politics , Volume 35 , Issue 1 , October 1982 , pp. 106 - 120
Copyright
Copyright © Trustees of Princeton University 1982

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References

1 “Indochinese Refugees: The Economic Factor,” The Economist, July 25–31, 1981, p. 44.

2 See Kindleberger, Charles, Europe's Postwar Growth: The Role of Labor Supply (Cambridge: Harvard University Press, 1967).CrossRefGoogle Scholar

3 See Marglin, Stephen, “What Do Bosses Do?” The Review of Radical Political Economics, VI (Summer 1974), 36–60Google Scholar; Stone, Katherine, “The Origins of Job Structure in the Steel Industry,” in Edward, Richard C., Reich, Michael, and Gordon, David M., eds., Labor Market Segmentation (Lexington, Mass: D.C. Heath, 1975), 27–84.Google Scholar

4 See Piore, Michael, “Dualism in the Labor Market: A Response to Uncertainty and Flux; the Case of France,” Revue économique, XIX (January 1978).Google Scholar Piore reviews all three approaches in Birds of Passage: Migrant Labor and Industrial Societies (London: Cambridge University Press, 1979).

5 Tiebout, Charles, “A Pure Theory of Local Expenditures,” journal of Political Economy, Vol. 64 (October 1956), 416–24.CrossRefGoogle Scholar

6 Any basic text in public finance provides an overview of theory relating to collective (or public) goods. For one excellent summary, see Boadway, Robin, Public Sector Economics (Cambridge, Mass.: Winthrop, 1979), chap. 2.Google Scholar

7 Tiebout (fn. 5). His model is founded on the following four assumptions about consumer behavior: complete residential mobility, full knowledge by all consumers of all the residential opportunités, no employment considerations affecting choice of location, and no cost or benefit spillovers between jurisdictions.

8 Further, the greater the number of cities, the greater the variety of packages of collective goods available, and the more economically optimal the distribution of consumers to communities.

9 Buchanan, James M. and Goetz, Charles J., “Efficiency Limits of Fiscal Mobility: An Assessment of the Tiebout Model,” Journal of Public Economics, 1 (April 1972), 25–42.CrossRefGoogle Scholar

10 See Richard Aronson, J. and Schwartz, Eli, “Financing Public Goods and the Distribution of Population in a System of Local Government,” National Tax journal, XXVI (June 1973), 137–59Google Scholar, for a full description of this problem.

11 Two points must be addressed here. First, when publicly supplied goods are viewed in isolation, it can be argued that higher income groups may be the major beneficiaries of some services. (For a brief survey, see Hibbs, Douglas A. Jr., and Madsen, Henrik Jess, “Public Reactions to the Growth of Taxation and Government Expenditure,” World Politics, XXXIII [April 1981], 413–35CrossRefGoogle Scholar, at 429 and n. 19.) However, when the mix of collective goods is considered together with the taxing mechanism, the result is usually progressive—either because the progressivity of the services more than offsets the regressivity of the taxes, or because the regressivity of the services is offset by the progressivity of the taxes. See Netzer, Richard, Economics of the Property Tax (Washington: Brookings institution, 1966).Google Scholar This issue is discussed at some length by Levy, Frank, Meltsner, Arnold J. and Wildawsky, Aaron in Urban Outcomes (Berkeley: University of California Press, 1974), chap. 4Google Scholar, “A Comparative Analysis,” esp. 240–46. After examining a subset of services (schools, streets, and libraries) in Oakland, California, and combining it with taxation data, the authors conclude that delivery is progressive. Of course, there may be countries (or communities) where both the benefits of services and taxation patterns are regressive. These will be potential “sending” communities (see below).

12 Aronson and Schwartz (fn. 10), 138.

13 The policy implication of this problem has been recognized by urban location theorists:

The most effective program would be to keep those people in the upper end of income distribution living in the city and to encourage the construction of high-rise office buildings and luxury apartments. To do this would increase the level of services offered the upper income people per tax dollar paid.

Miller, Stephen M. and Tabb, William K., “A New Look at a Pure Theory of Local Expenditures,” National Tax Journal, XXVI (June 1973), 161–76Google Scholar, at 170.

One problem in implementing this change is that the current residents must be far-sighted enough to change the mix of collective goods from one that is preferred by the majority to one that benefits a group which is continually becoming smaller (the higher-income residents)—a continuing dilemma for central cities. The disequilibrium incentives that lead to the continued migration of the rural poor to the urban centers will eventually drive higher-income residents out of the city. Moreover, central city expenditures tend to have a high degree of redistribution, and any increase in the ratio of services to taxes for lower income groups (or even an increase in their relative numers through immigration) worsens that ratio for upper income groups. This leaves the latter relatively worse off than their suburban counterparts and increases their incentives to relocate. Thus, even if their preferred mix of collective goods is the one offered by the central city, the worsening tax situation may eventually cause the relatively affluent to leave.

14 Although health care and clean water are relatively tangible goods, the certainty of their continued delivery may be of decisive importance to migrants. This, again, is intangible.

15 Grubel, Herbert B. and Scott, Anthony D., “The International Flow of Human Capital,” American Economic Review Papers and Proceedings, Vol. 56 (May 1966), 268–74Google Scholar, at 274.

16 Again, an unexpected change in government represents a new collective good. Uncertainty as to the form of government is undesirable for many individuals; increased possibility of violent governmental change is unacceptable to most people. Structural political stability is a highly valued collective good.

17 The original urban location choice model assumed that the location decision was independent of the employment decision or opportunity. This was reasonable since the entire fiscal residual dimension was assumed away so as to focus on the collecive goods dimension.

18 See Surki, Astri, “Indochinese Refugees: The Impact on First Asylum Countries and Implications for American Policy,” U.S. Congress, Joint Economic Committee, November 1980Google Scholar, for a comprehensive discussion of the Indochinese refugee situation.

19 Sweden seems to be willing to accept some migrants who are not accepted by other countries such as the United States. See Surki, ibid., n. 10.

20 However, so-called transaction costs and information costs may vary between receiving countries. Prior to the 1970s, Commonwealth residents could gain access to the United Kingdom relatively easily.

21 Most of the “tax havens for the rich” appear to be small countries with a low population. This is consistent with the precepts of public choice. Even though states with large populations might be better off it they attracted wealthy migrants, they are less likely to do so because the marginal impact is much smaller.

22 “Most desirable” has been interpreted in social and cultural as well as in economic terms, but we focus on only the last.

23 Teitelbaum, Michael S., “Right versus Right: Immigration and Refugee Policy in the United States,” Foreign Affairs, Vol. 59 (Fall 1980), 21–59CrossRefGoogle ScholarPubMed, at 25.

24 See Dirks, Gerald E., Canada's Refugee Policy: Indifference or Opportunism? (Montreal: McGill-Queen's University Press, 1977), 242.Google Scholar

25 Piore (fn. 4, 1979).

26 See Howard, Rhoda, “Contemporary Canadian Refugee Policy: A Critical Assessment,” Canadian Public Policy, VI (Spring 1980), 361–73CrossRefGoogle Scholar, at 370.