Explaining the Socioeconomic Well-Being of Immigrants and Returned Migrants: An Econometric Analysis of the Hong Kong and the Canadian Censuses of 2001

Presented by CHEUNG Kin Man (Man), WONG, Hoi Shan (Sharon)

Written byTIAN Fangmeng, MA Zhongdong

JIMI/RIMI Volume 7 Number 4 (Fall 2006): 473-491

Focus of the article

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Explanation of return migration to HK based not on the economic failure of HK immigrants but on their strategic vision to accumulate human capital while abroad which they then exploit on their return.

Outline of the Presentation

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Introduction to the background of HK migration and return migration

Review on theories of re-migration Data and preliminary results by investigating

both the HK and Canadian Censuses of 2001 Statistical Models and Variables Examined Findings through the data Concluding the findings Discussion / Q & A

Introduction

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In 1980s, migration because of political uncertainty of the 1997 handover.

40,000 to 50,000 migration to Western countries Eg. USA, Canada and Australia

Institutional barriers in receiving area were low e.g. Canada point system and investment scheme attract H.K. professionals and businessman

Return migration in early 1990s. >12% of Hong Kong emigrants returned most are highly educated

Introduction

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New approach- to investigate return migration

Integrating the censuses of sending and the host society

Explaining cross-society differences in income and job promotion prospect.

Through review theories, census integration procedure and reports on findings

Review of Theories

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Theories of Re-Migration Imperfect information

return migration motivated by disappointment in new countries

Information asymmetry- employer ignorant on skills of immigrant-overpay to new immigrants-more information, pay less to them-encouraging return migration, especially for those low skilled

Review of Theories

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Return migration is a sequence of optimal life-cycle residential location

Triangle model emphasizes dynamic nature of return migrant

Three periodperiod 1:migrants migrate to entrepot country to obtain transnational capitalperiod 2:migrants acquired transnational capital when resident in the entrepot countryperiod 3:stay or leave depend on rate of return in each place

Review of Theories

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New hypothesis-migrants acquired human capital move away from entrepot country to seek higher return-experienced migrants are likely to move again to improve social status

Refer to return migrants in Hong Kong- higher rate of return- more likely to rise to managerial position

Data and Preliminary Results Return migration of highly educated

facilitated the development of managerial class in Hong Kong

Administrators and managers in H.K.- returnees with non-local degree (22.6%)- came from Canada (43.1%)

Details of return imgrants from Canada- non- local degree in Canada (56.5%)-educated in Hong Kong (26.6%)- Foreigners(9.8%) and Mainlanders(6.1%) were emigrated from Canada

Canada main source of human capital for H.K.9

Data and Preliminary Results

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Comparison of monthly median income of different groups1. Canadians in H.K. (HKD31,250)2. Hong Kong stayers (HKD25,000)3. Canadian natives (HKD23,365)4. Hong Kong returnees (HKD18,850)5. Mainland returnees (HKD17,750)6. Newly arrivals in Canada (HKD13,930)

Higher income in Hong Kong than in Canada

Data and Preliminary Results

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Comparison of average age From oldest to youngest

-former Mainland immigrants (43.9)-returnees born in Hong Kong (30.8)

Returnees in Hong Kong were younger than new immigrants in Canada and younger than former immigrants in Canada before 1996

Statistic model to study changes in income and social mobility

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Two-stage process Effect of migration on income changes

OLS regression model Regress (log) income on migration status (m) and

personal characteristics (s) such as sex, age, and level of education. Log (Income) = (m,s) β + ε

Effect of migration on social mobility (promotion possibility) Binary logit model Regress (Logit) the odds of moving to a managerial

position on both migration status (m) and personal factors (s). Logit (Manager =1, others =0) (m,s) β + ε

Points to note for the statistics

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Goodness of fit was expected to be low because the cross-societal (HK and Canada) nature of the

analysis the sample is restricted only to the highly educated

Odds ratio A ratio of the odds of a category to those of the

reference group, other factors being equal Effect of a variable is +ve when the odds-ratio is

larger than one (vice versa) Effects of the personal characteristics were

controlled Age and working experience were offered two

model specifications to avoid the problem of multicollinearity since they are highly correlated.

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The variables and their expected effect on Income Changes and Promotion Possibility.

Odds ratio Odds-ratio larger

than 1 Effect of variable is +ve (vice versa)

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The human capital composition and unemployment rates for various migrant categories were tabulated.

The large share reported for 1 or 2 fields of study in a migrant category reflects the movement of

certain types of human capital.

Further highlights

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On the Canadian side, a science and engineering background is much more important for Chinese immigrants than for the Canadian natives. Canadian immigration policy which favors the inflow of

engineering and science talent to supplement native lack of science and engineering talents and protect the already adequate business and social sciences talent.

On the HK degree-holders side, a business education background was more important among returnees than among stayers. Local social capital can enhance business opportunities

Business graduates in Canada were inclined to return to HK

However, higher unemployment rate of HK returnees of business graduates than HK stayers business graduates (6.2% > 2.2%).

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Overall descending order of unemployment rates Canadian side:

1st newly arrived Mainland immigrants (15.6%) 2nd newly arrived HK immigrants (11.4%) 3rd former Mainland immigrants (4.9%) 4th former HK immigrants (4.4%) 5th Canadian natives (3.5%)

HK side: 1st Mainland returnees (7.3%) 2nd HK returnees (4.8%) 3rd Canadians in HK (2.9%) 4th HK stayers (1.9%)

The Findings

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The findings after running the two regression models

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Income

Findings – the Income Model

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Findings from the Income Model Returnees (0.4024) slightly lower than that of stayers (0.5234)

Limited number of university places in HK encouraged many less competitive to go abroad

Inferior group have reduced economic performance of returnees Canadian natives in HK as expatriates managers earned the most

income (0.7249) HK-born returnees (0.4024) earned more than Mainland-born

returnees (0.2608), but difference was small (and it was 2001, small sample size)

Former immigrants who stayed abroad and those who returned to HK : striking results! The income ratio between the 2 groups was 1:1.5! (exchange rates already

considered) i.e. Returnees earned 1.5 times more than those who chose to stay in

Canada! In sum, positive effect is derived from return migration on

income Better leave Canada and come back to HK!

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Possibility of Promotion

Findings –the Promotion Possibility Model

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After personal factors were controlled Descending order of odds ratio for improving a person’s

chance of promotion: 1st Canadians in HK (2.639) 2nd Mainland-born returnees (1.856) 3rd HK-born returnees (1.707) 4th HK stayers (1.489) 5th Newly arrived HK immigrants (1.204) 6th Canadian natives (1.158) 7th Former HK immigrants in Canada (1, reference group) 8th Former Mainland immigrants to Canada (0.745) 9th Newly arrived Mainland immigrants in Canada (0.667) [Greater the odd ratio, more positive the effect]

Major striking finding: HK returnees (1.71) meaning they are 71% more likely to take managerial positions than former HK immigrants in Canada (HK migrants chose to stay in Canada). Again, better not to stay in Canada. Please come back to HK!

Conclusion

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2-stage process to measure the income and promotion effects of return migration

Return migrants brought transnational human capital to HK helping HK to develop a managerial class and increased their own personal income.

Socioeconomic well-being of Chinese immigrants in Canada was inferior to that of the Canadian-born.

After transnational human capital was gained, returnees can regain their local social capital and improve their socioeconomic well-being in HK.

Conclusion

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Implications on policies Host country: investment in integration is as important

as educating immigrants to serve society Sending country, important to find ways to attract

overseas talent to return and remember that upward mobility after returning but not just income prospects.

Reminder: this article focused only on HK and Canada

Suggestions Integrating censuses data from other countries (such as

Australia & the US) with other Chinese regions should be interesting.

Further analysis on triangular movements such as onward movement by Chinese immigrants from Canada to the US and return migration from other hosting countries back to the sending Chinese regions can also be done.

Q & A

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Thank you for your attention! Any comments or questions?