The refugee crisis in the EU

Refugees surging into the EU have dominated the headlines in recent weeks. The situation has been building over time and recently reached crisis point, with thousands of migrants streaming into Greece and Hungary every day. The current situation is largely rooted in continued unrest and desperate conditions in Syria; earlier this summer, the influx was largely due to instability in Libya that is resulting in large numbers of migrants setting off from there to Greece and Italy. The latest wave is also setting off for the EU from Turkey.

A set of EU rules called the Dublin Regulation requires that asylum seekers--people asking to be declared refugees and granted the right to stay in the EU--apply for asylum in the first EU country they reach. This means huge numbers of applicants in Greece, Hungary and other countries in southern and eastern Europe. Those ports of entry are relatively poor and offer few government-funded benefits to refugees. Many migrants therefore want to go to Germany and other relatively wealthy countries in northern and western Europe. Some countries in northern and western Europe are welcoming the asylum seekers, most notably Germany, while others are trying to discourage them, such as Denmark. Indeed, Germany's non-enforcement of the Dublin Regulation and its relatively generous benefits to refugees may be contributing to the influx. 

Important economic issues related to the crisis include: Are the migrants refugees or economic migrants? How do the policies of the EU or its member states affect the inflow of migrants? How should the EU and its member states respond?

Here's a great graphic on the current scale of the migration crisis in the EU. The United Nations High Commissioner on Refugees (UNHCR) has lots of information about the crisis. The EU is discussing whether to adopt quotas to distribute refugees across member states. The Common European Asylum System explains much of the EU rules regarding asylum seekers.

The Fiscal Cost of Protecting the Border

As Chapters 10 and 13 discuss, the US has spent literally billions of dollars protecting the US border. On the southern US border, we witnessed several different variations of the ‘fence’, which are pictured below.  Some of them are very tall and nearly impassible (which are located near large urban centers), while others (in more remote areas) represent only a marker of the border and would be extremely easy to cross.  Our ride-along with the US Border Patrol highlighted how the fence is mostly symbolic- that if people (migrants, drug smugglers, human traffickers) really want to get across it, they can.  In fact, we saw a section of the fence that was cut and then patched up by border patrol, indicating just how easy it is to get through much of the fencing.  However, technology is doing most of the work in protecting the US-Mexico border.  The Department of Homeland Security is employing video surveillance, drones, and motion sensors as their primary line of defense, along with 21,000 border patrol agents in 2014 (up from 4,000 in 1992, according to the US Customs and Border Protection website). The cost of this protection is $3.6 billion in recent years.  The technology exists along the border, but also in the interior with border checkpoints sometimes several miles away from the actual border.  A recent book entitled Border Patrol Nation  by Todd Miller discusses recent trends in border militarization. 

Border Economies

In our trip to the US-Mexico border, we spent four days in El Paso, Texas and Cuidad Juárez, Mexico. Effectively, El Paso and Juárez constitute one large city split by the border fence, where people move between the two cities going about their daily lives.  Many people live on one side of the border and (legally) work on the other side.  Families are spread across the two cities (and hence the two countries). Mexicans living in Juárez regularly come to El Paso to shop.  Dollars are widely accepted in Juárez, and both cities are bilingual.  There are several bridges in which people can walk across to the other country (but still have to go through border security).  Border patrol is present throughout both cities.   The El Paso-Juárez sector epitomizes a border economy, with goods, services and people flowing across the border each direction throughout the day. On our drive through Juárez, we saw literally dozens of maquiladoras (often referred to as maquilas) –  huge manufacturing plants set up by US corporations (Boeing, Lexmark, and Electrolux to name a few) to take advantage of lower wages in Mexico (maquilas became prevalent as the result of North American Free Trade Agreement established in 1992).   As Chapter 9 discusses, immigration between countries can have important impacts on international trade, product diversity, and the price of goods and services in each country.  This is exactly the case in El Paso and Juárez.     

Trip to US-Mexico Border

A few weeks ago, Cynthia and I took a week-long trip to visit the US-Mexico border. We started in El Paso, Texas (which borders with Juarez, Mexico), visited Nogales, Mexico and ended in Tucson, Arizona. Below is a map of the route we followed.  It was an amazing trip – we participated in a border patrol ride-along in El Paso, visited nonprofit organizations in Juarez and Nogales that worked with migrant communities, walked on a migrant trail in the Sonora desert near Tucson, and saw a naturalization ceremony.  The goal of the trip was to get a real sense of the migrant experience, to witness the militarization of the border, and to better understand the humanitarian crisis taking along the southern US border.  We will write a few blog posts in the next few weeks that document different aspects of our trip as they relate to themes in the textbook.  One of our colleagues on the trip created a storify of our trip, which you can find here.

Undocumented immigrants and credit markets

Undocumented, or illegal, immigrants face a number of obstacles to economic success in the host country. Not having "papers" not only makes it more difficult to find a job, it also makes it more difficult to access financial services, from opening a bank account to taking out a loan. A paper by Nathalie Martin, "Giving Credit Where Credit Is Due," explores how undocumented immigrants in the US use--or don't use--banks and credit.

Number of global refugees surged in 2014

The 2014 report of the United Nations High Commissioner for Refugees indicates there were nearly 60 million displaced people worldwide in 2014, a record number. This number includes 11 million people who are internally displaced, or remain in their own country. Half of the 60 million are children, and most are in poor countries. About 14 million people were displaced in 2014, many from Syria and countries in Africa. The New York Times had a long article about the report and some very cool maps.

French Police Dismantle Migrants’ Camps in Paris and Calais

Following Madeline's post, a WSJ article on Wednesday, June 3, 2015, (see link below) discussed how French police have dismantled migrant camps in Paris and the Port of Calais over the past week. These migrants are moving through France from Africa and Syria to head to the UK, but get stuck in France and set up camps and way stations on their journey.  Just this week, 380 migrants from Sudan, Eritrea and Somalia were relocated to emergency housing after they had set up a migrant camp under a subway bridge in northern Paris.  Two camps in and outside the port of Calais were also dismantled by police and about 140 people were either being detained or relocated. 

As the WJS article mentions, the EU has been struggling to address the large flows of both undocumented immigrants in search of employment and political refugees who are entering Europe from the South.

See:  http://www.wsj.com/articles/french-police-dismantle-migrants-camps-in-paris-and-calais-after-weekend-clashes-1433247191

Difficult journeys to enter the U.S.

The Wall Street Journal had an excellent article on May 30-31, 2015, about the arduous journeys some migrants undertake to enter the United States illicitly. The article focuses on migrants who cross the Darien Gap, which connects Panama with South America. From there, migrants typically make their way overland through nine more countries to the U.S. border. The route is attractive to some migrants because they can get a visa to enter some South American countries. Interestingly, even some migrants from Cuba--who will qualify for legal status if they can reach the U.S.--use the route, which involves dangers ranging from bloodsucking bats to poisonous snakes to predatory smugglers and gangs.

The novel Americanah

I recently read an inspiring book entitled Americanah by Chimamanda Ngozi Adichie.  The novel is about a Nigerian woman who migrates (legally) to the United States for college in the midst of political turmoil at home. Years later, her boyfriend migrates to the United Kingdom illegally. The story documents each of their experiences, their reasons behind their migrations, their search for education and work abroad, and their desires to return home some day. The novel also addressed the complicated aspects of being African in the U.S. and the U.K. (A recent op-ed in the NY Times also sheds light on this.)

While most economics professors do not have students read novels as a part of their classwork, I highly recommend reading a novel that documents other aspects of the immigrant experience. Books such as Americanah will help you remember that immigration has significant personal, social and psychic costs that are often difficult to quantify (as discussed in Chapter 2 of the textbook).

More Middle-Class Immigrants

David Brooks recently wrote an interesting piece in the NY Times documenting the flow of immigrants into English-speaking countries (e.g., the United States, United Kingdom, Australia, Canada and New Zealand). Perhaps the most interesting aspect of his op-ed is his discussion of middle-class immigrants. Workers in the poorest countries of the world do not have the resources to migrate, while upper-income workers have little incentive to migrate. The majority of recent worldwide migrant flows originate in developing countries that are experiencing economic growth and hence growing middle classes (notable examples are China and India). Income is an important push factor for immigrants (as discussed in Chapter 2), and as countries develop, more workers have the resources and aspirations to migrate abroad.   

Cuba Uprising

Before this spring, Cuba was the classic example of a closed economy.  Goods and services were not allowed to enter or leave the country, there was practically no foreign capital investment and workers were not allowed to leave the country illegally, nor were many people allowed to enter the country.  As Chapter 7 discusses, none of the components of an open economy existed (labor, capital and goods/services mobility).  Occasionally, there have been massive outflows of Cuba to the United States (Chapter 8 discusses the Mariel Boat Lift in 1980).  Known for its famous cigars, Cuban cigars became a rare commodity in the U.S. due to the trade embargo that has existed since 1960. Visitors to Cuba could not use credit cards or ATMs since U.S. banks were not allowed to operate there. Overall, the country was stuck in the 1950s - in fact, old 1950s and 1960s U.S. cars are commonly seen in the streets of Havana.

In the spring of 2015, the United States and Cuba began diplomatic conversations that could lead to a better economic relationship.  These conversations are the first step in opening up the Cuban economy.  Capital restrictions are gradually being relaxed.  More visitors are being allowed to enter. There are discussions that Cuban foreign goods and services will be sold abroad.  All of these factors should increase raise per capita GDP over the long term (per capita GDP in Cuba is approximately $6,000 in 2011, according to the World Bank’s World Development Indicators.  However, the future is unknown: the economic and political situation is changing there on a daily basis, which will have effects on the inflow and outflow of workers in Cuba. In fact, as the Economist reports in May 2015, more Cubans are fleeing to the United States as Cubans think that the U.S. will tighten its policy towards Cuban immigrants. The Brookings Insitution has a nice discussion of changing U.S.-Cuba immigration policy. 

Migration across the Mediterranean

Migration from Africa to Europe across the dangerous waters of the Mediterranean was in the headlines in April as hundreds of migrants died. As chapter 1 notes, the Mediterranean Sea is the most dangerous stretch of water in the world for migrants. Despite this, the number of migrants trying to cross it seems to be rising. Many of these migrants are Syrian refugees; others are from sub-Saharan Africa. Many of them are trafficked through Libya before they try to cross the Mediterranean into Italy. The Economist had a great article about this crossing:.


Europe is struggling with how to address the continued influx of migrants from Africa. As chapter 3 discusses, EU countries have agreed that migrants are supposed to seek asylum in the first country where they arrive. The migrants land in southern Europe, where the economies are much weaker than in northern Europe. These migration flows impose a greater burden on the countries that are in a worse position to bear those costs. The EU is debating whether to try to distribute migrants--or the costs--more equitably across countries.

Here's an interactive map of migration flows across the Mediterranean (hat tip to Graziella Bertocchi).

When I was in Senegal in April 2015 for a conference on migration organized by the Institute for the Study of Labor, we met two young men who migrated illegally to Spain. Both went on boats from Mauritania to Spain. Their crossings took 6 days, with lots of people crammed onto a small boat. One of them had a brother who died making a similar crossing. They went because of limited economic opportunities at home. They worked in the informal sector in Europe, selling goods on the street and the like.

Burmese migrants

Chapter 1 includes migrants from Myanmar to Thailand as an example of workers moving from a very poor country to a poor country. Another example of migrants from Myanmar (or Burma) has been in the news lately. News outlets have been reporting on ethnic Rohinga migrants, who are Muslim, fleeing Myanmar for other countries in Southeast Asia. Many of the migrants are or were in desperate circumstances and victims of traffickers--thousands have been stranded at sea, and a mass grave of migrants was discovered near the Myanmar-Thailand border. The Rohinga are an exmaple of "stateless" people, or people who have no citizenship anywhere. See these articles in the New York Times and the Wall Street Journal and a NPR audio clip.

Immigration and Soccer

Chapter 2 includes a discussion of how soccer players (football players to Europeans) move across countries in response to differences in tax rates. The New York Times Upshot column ran an article related to this on April 1, 2015. No April Fools joke here: There are proposals to restrict the number of foreigners playing soccer in Britain. As the article discusses, allowing foreigners to play soccer on British teams has raised the quality of soccer there--but the same is true in other countries as well. As British teams have struggled in international competition in recent years, backlash against foreign players has grown. But would reducing the number of foreign players improve British teams' chances? That's not an economic question, but it seems unlikely the answer would be yes.