David McKenzie | |
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Occupation | Economist |
Website | https://sites.google.com/site/decrgdmckenzie/ |
David McKenzie is a lead economist at the World Bank's Development Research Group, Finance and Private Sector Development Unit [1] in Washington, D.C. [2] His research topics include migration, microenterprises, and methodology for use with developing country data. [1] [2]
McKenzie is also a contributor to the World Bank's Development Impact blog [3] and affiliated with the International Growth Centre [4] and Innovations for Poverty Action. [5]
McKenzie received his B.A. (B.Com.) from the University of Auckland in New Zealand and his Ph.D. in economics from Yale University. [1] [2] He spent four years as an assistant professor at Stanford University before joining the World Bank. [1] [2] He is currently on the editorial boards of the Journal of Development Economics, World Bank Economic Review, Journal of Economic Perspectives, and Migration Studies. [2]
McKenzie also co-authored a write-up with Berk Ozler on the impact of economics blogs. [6] His findings were discussed by Tyler Cowen on Marginal Revolution. [7]
McKenzie's research focuses on migration, private sector development, and data methodology. According to IDEAS/RePEc, McKenzie belongs to the top 1% of economists in terms of research output. [8] He frequently co-authors with Christopher Woodruff, John Gibson, Steven Stillman and Suresh de Mel. [9] He has notably conducted research in Mexico, India and Sri Lanka.
One of the main fields of McKenzie's research is migration, with much of his research concentrating on migration between Mexico and the United States. A key theme of that research is that the impact of migration goes far beyond remittances and includes e.g. impacts on child health, the ability of others to migrate, community inequality, and incentives for education. [10] For instance, in work with Nicole Hildebrandt, McKenzie finds that migration improves child health by increasing rural Mexican households of emigrants both by raising their wealth and health knowledge. [11] In another study with Hillel Rapoport in rural Mexico, McKenzie finds that migration depresses schooling attendance and attainment as boys emigrate and girls take up more household tasks. [12] In further work, McKenzie and Rapoport have explored the role of migrant networks in Mexico, which are found to substantially decrease the costs for future migrants and overall reduce inequality across communities with high levels of past migration. [13] Moreover, McKenzie and Rapoport also observe that the presence of migrant networks drives self-selection, with Mexican communities with strong migrant networks "sending" typically less educated members to the US compared with communities with weaker networks, in line with Borjas (1987) and Chiquiar and Hanson (2005). [14]
Another nexus of McKenzie's research on migration has been migration in the Pacific. In work with John Gibson, McKenzie notably found that the desire to maximize income cannot explain migration patterns among the very highly skilled, with many potential emigrants - especially those more risk averse, impatient or inept at foreign languages - deciding not to emigrate despite very high returns to migration, whereas many emigrants - especially those with strong ties to homebound family or who didn't emigrate for reasons of lifestyle - choose to return even though doing so implies forgoing large sums of income. [15] In another study, McKenzie, Gibson and Steven Stillman analyze the effects of a Tongan migration lottery program to New Zealand, finding a negative impact of emigration on the resources of remaining household members, as remittances don't fully offset the shortfall in labour earnings; more generally, this suggests that comparisons of migrant and non-migrant households are likely to be biased due to self-selection of both households and household members into migration. [16] By contrast, when studying the impact of New Zealand's seasonal worker programme on households in Tonga and Vanuatu, McKenzie and Gibson observe it to strongly improve those households' income, consumption, savings and standard of living. [17]
Most recently, in research with Rapoport, Albert Bollard and Melanie Morten, McKenzie has challenged concerns that educated migrants remit less, finding instead that - while results differ across destinations - more educated migrants remit on average more, with the effect within that group being mainly attributable to the higher income itself rather than to background characteristics. [18] Finally, in a popular article addressing questions around brain drain, McKenzie and Gibson highlight that brain drain has remained relatively stable over time, that skilled and unskilled migration are strongly correlated, that the likelihood of brain drain increases the lower domestic standards of living, security, political stability and opportunities for rewarding careers, and that examples of brain gain exist, among else. [19]
Another key area of McKenzie's research are (micro-)enterprises in developing countries and constraints to their growth. For instance, McKenzie and Christopher Woodruff find that start-up costs of Mexican microenterprises tend to be very low and returns to capital high, suggesting that entry costs are unlikely to provide an empirical basis for poverty traps. [20] With regard to management practices, McKenzie, Nicholas Bloom, Aprajit Mahajan and John Roberts argue that the lack of good management practices (e.g. monitoring, target-setting or incentives) and owners' reluctance to delegate decision making to managers constrain the productivity growth of large firms in developing countries. [21] In further research on Indian textile plants, McKenzie, Bloom, Mahajan, Roberts and Benn Eifert find these plants to often still rely on informal management practices because of a mix of lack of both information and competition, but that the adoption of better practices leads to large and sustained gains in productivity. [22]
Much of McKenzie's research on microenterprises has been conducted with Suresh de Mel and Woodruff in Sri Lanka. In one study, after randomly assigning cash grants to microentrepreneurs, they find annual real returns to capital of 55-63% per year, i.e., much higher than prevailing market interest rates, with the returns varying by entrepreneurial ability and household wealth, but not by risk aversion, suggesting that insufficient access to credit might not be a key constraint. [23] Faced with the difficulty of measuring profits, they find that simply asking firms about their profits offers a more accurate measure than detailed questions on revenues and expenses, as firms tend to underreport a nearly a third of their revenues, and that while providing entrepreneurs with account diaries helps address that issue, it doesn't significantly change reported profits. [24] Moreover, the positive returns to capital are found to be completely concentrated among enterprises owned by men, a fact that cannot be explained by differences in the entrepreneurs' characteristics, but rather suggests that capital given to female entrepreneurs is more likely to be consumed or misinvested by other household members. [25] In further work on this issue, they randomly offer both existing and potential female microentrepreneurs either the ILO's Start-and-Improve Your Business (SIYB) programme or a combination of SIYB training and a cash grant, then finding that the training only has an impact on business profitability for new entrepreneurs and that the impact of the combined support dissipates in the second year. [26] In a comprehensive review of research on business trainings in developing countries, McKenzie and Woodruff conclude that business trainings generally have only modest impacts on existing firms, partly because firm owners' application of the taught practices is often limited, though trainings seem to help prospective entrepreneurs launch start-ups faster and better. [27] Together with Woodruff and de Mel, McKenzie has argued most microentrepreneurs ("own account workers") are more akin to wage workers than larger firm owners, suggesting that most of them - unlike e.g. Hernando de Soto's argument - are merely waiting for wage work and unlikely to become employers. [28] Another key finding related to Sri Lankan firms is that providing informal enterprises with payments equivalent to two months of the profits of the median firm leads to registration of half of the firms, whereas the mere provision of information about the registration process and possibility of getting reimbursed for registration costs has no impact; land ownership issues are raised as the most common reason for not registering. [29]
Finally, more recently, when comparing the impact of cash and in-kind grants on the profitability of microenterprises in urban Ghana, McKenzie, Woodruff, Marcel Fafchamps, and Simon Quinn found a flypaper effect whereby - unlike cash - capital coming directly into the business "sticks" there, though neither type of grants has an impact on enterprise profitability when provided to female subsistence entrepreneurs. [30]
A third area of McKenzie's research has focused on methodological issues across a range of topics, including the issue of endogeneity regarding migration decisions for the measurement of migration's impact (with Marcin Sasin), [31] the measurement of inequality with household asset indicators through PCA and bootstrapping, [32] the measurement of earnings mobility through dynamic pseudo-panel methods (with Francisca Antman), [33] the superiority of pair-wise matching and stratification over other randomization methods in small samples or for very persistent outcome variables, [34] and the possibility of measuring subjective expectations in developing countries through probabilistic questions (with Adeline Delavande and Xavier Giné). [35] Further important work by McKenzie includes:
McKenzie was listed as one of the "40 under 40 International Development Leaders" by devex. [41] Tim Ogden interviewed McKenzie for his book Experimental Conversations, and parts of the interview were published on the Philanthropy Action website. [42] [43] The Financial Access Initiative also published an interview of McKenzie. [44]
McKenzie has been cited in The New York Times , [45] The Wall Street Journal , [46] and Financial Times . [47]
Human capital flight is the emigration or immigration of individuals who have received advanced training at home. The net benefits of human capital flight for the receiving country are sometimes referred to as a "brain gain" whereas the net costs for the sending country are sometimes referred to as a "brain drain". In occupations with a surplus of graduates, immigration of foreign-trained professionals can aggravate the underemployment of domestic graduates, whereas emigration from an area with a surplus of trained people leads to better opportunities for those remaining. But emigration may cause problems for the home country if the trained people are in short supply there.
Human migration is the movement of people from one place to another with intentions of settling, permanently or temporarily, at a new location.
A remittance is a non-commercial transfer of money by a foreign worker, a member of a diaspora community, or a citizen with familial ties abroad, for household income in their home country or homeland. Money sent home by migrants competes with international aid as one of the largest financial inflows to developing countries. Workers' remittances are a significant part of international capital flows, especially with regard to labor-exporting countries.
Geographic mobility is the measure of how populations and goods move over time. Geographic mobility, population mobility, or more simply mobility is also a statistic that measures migration within a population. Commonly used in demography and human geography, it may also be used to describe the movement of animals between populations. These moves can be as large scale as international migrations or as small as regional commuting arrangements. Geographic mobility has a large impact on many sociological factors in a community and is a current topic of academic research. It varies between different regions depending on both formal policies and established social norms, and has different effects and responses in different societies. Population mobility has implications ranging from administrative changes in government and impacts on local economic growth to housing markets and demand for regional services.
Immigration is the international movement of people to a destination country of which they are not usual residents or where they do not possess nationality in order to settle as permanent residents. Commuters, tourists, and other short-term stays in a destination country do not fall under the definition of immigration or migration; seasonal labour immigration is sometimes included, however.
Opposition to immigration, also known as anti-immigration, has become a significant political ideology in many countries. In the modern sense, immigration refers to the entry of people from one state or territory into another state or territory in which they are not citizens. Illegal immigration occurs when people immigrate to a country without having official permission to do so. Opposition to immigration ranges from calls for various immigration reforms, to proposals to completely restrict immigration, to calls for repatriation of existing immigrants.
Various effects of migration have been an area of study and debate amongst economists. Researchers have studied questions including: if migrants hurt wages for natives; what is their tax contribution/burden; what are the effects of the money migrants send home (remittances); and how does the loss of workers affect the sender country.
Maurice Kugler is a Colombian American economist born in 1967. He received his Ph.D. in economics from UC Berkeley in 2000, as well as an M.Sc. (Econ) and a B.Sc. (Econ) both from the London School of Economics. Kugler is professor of public policy in the Schar School of Policy and Government at George Mason University. Prior to this, he worked as a consultant for the World Bank, where he was senior economist before (2010-2012). Most recently he was principal research scientist and managing director at IMPAQ International.
The flypaper effect is a concept from the field of public finance that suggests that a government grant to a recipient municipality increases the level of local public spending more than an increase in local income of an equivalent size. When a dollar of exogenous grants to a community leads to significantly greater public spending than an equivalent dollar of citizen income: money sticks where it hits, like a fly to flypaper. Grants to the government will stay in the hands of the government and income to individuals will stay with these individuals.
Michael Andrew Clemens is an American economist who studies international migration and global economic development.
Women migrant workers from developing countries engage in paid employment in countries where they are not citizens. While women have traditionally been considered companions to their husbands in the migratory process, most adult migrant women today are employed in their own right. In 2017, of the 168 million migrant workers, over 68 million were women. The increase in proportion of women migrant workers since the early twentieth century is often referred to as the "feminization of migration".
Yana van der Meulen Rodgers is a professor in the Department of Labor Studies and Employment Relations in the School of Management and Labor Relations at Rutgers University,. She also serves as Faculty Director of the Center for Women and Work at Rutgers.
Sanjiv M. Ravi Kanbur, is T.H. Lee Professor of World Affairs, International Professor of Applied Economics, and Professor of Economics at Cornell University. He worked for the World Bank for almost two decades and was the director of the World Development Report.
Hometown associations (HTAs), also known as hometown societies, are social alliances that are formed among immigrants from the same city or region of origin. Their purpose is to maintain connections with and provide mutual aid to immigrants from a shared place of origin. They may also aim to produce a new sense of transnational community and identity rooted in the migrants' country of origin, extending to the country of settlement. People from a variety of places have formed these associations in several countries, serving a range of purposes.
John Hoddinott, is a Canadian economist and the Howard Edward Babcock Professor of Food, Nutrition and Public Policy at Cornell University. In 2002–2015, Hoddinott was a Deputy Division Director at the International Food Policy Research Institute. Since 1997, he has been a research associate at the Centre for the Study of African Economies at the University of Oxford. Hoddinott received his DPhil in 1989 from Oxford University.
Hillel Rapoport is an economist at the University of Paris 1 Pantheon-Sorbonne and Paris School of Economics. He specializes on the dynamics of migration and its impact on economic development as well as on the economics of immigration, diversity, and refugees' relocation and resettlement and ranks as one of the leading economists on the topic of migration.
Frédéric Docquier is a Belgian economist and Professor of Economics at the Catholic University of Louvain (UCLouvain). He ranks as one of the leading economists in the field of international migration, with a focus on brain drain and skilled migration.
Christopher Woodruff is an American economist and Professor of Development Economics at Oxford University.
Catalina Amuedo-Dorantes is a Spanish economist, a Professor in the Economics and Business Management faculty at the University of California, Merced and a Professor and Department Chair at San Diego State University. Since 2015, she has been the Western Representative for a standing committee called the Committee for the Status of Women in the Economics Profession (CSWEP). Her field of work focuses on the fundamentals of labour economics and international migration, particularly the nature of immigration policies and its impact on migrant's assimilation into the community at a state and local level. Amuedo-Dorantes has published multiple articles in refereed journals including Journal of Public Economics, Journal of Population Economics, International Migration, and Journal of Development Economics.
Landlessness is the quality or state of being without land, without access to land, or without having private ownership of land. Although overlapping considerably, landlessness is not a necessary condition of poverty. In modern capitalist societies, individuals may not necessarily privately own land yet still possess the capital to obtain an excess of what is necessary to sustain themselves, such as wealthy individuals who rent expensive high-rise apartments in major urban centers. As such, landlessness may not exist as an immediate threat to their survival or quality of life. This minority of landless individuals as sometimes been referred to as the "landless rich." However, for the majority of landless people, including the urban poor and those displaced into conditions of rural-to-urban migration, their condition of landlessness is also one of impoverishment, being without the capital to meet their basic necessities nor the land to grow their own food, keep animals, or sustain themselves. During times of economic prosperity in modern capitalist societies, the liabilities of landlessness may not be noticeable, especially to the wealthy, but during times of economic failure and rising unemployment, the liabilities of landlessness become more visible.
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