1. Migration and Wellbeing: Some reflections Mauricio Cárdenas (with Vincenzo Di Maro and Carolina Mejía) InterAmerican Development Bank’s project on Quality of Life Conference on Regional Trade Agreements, Migration and Remittances: Focus on CAFTA and Latin America Sam Houston State University, Huntsville, TX April 12, 2008

2. Research Questions Effects of migration on wellbeing. Previous emphasis on the effects of remittances on poverty and human capital investment. Interesting to go beyond the relationship between migration, income, and choice (consumption of tangible goods and services). Migration may have welfare reducing effects such as family fragmentation. For example, does migration offset (or amplify) vulnerabilities?

3. Outline 1.The four dimensions of “Quality of Life” 2.Livability and migration 3.Satisfaction with life, vulnerabilities and migration 4.Econometric results 5.Conclusions

4. Outline 1.The four dimensions of “Quality of Life” 2.Livability and migration 3.Satisfaction with life, vulnerabilities and migration 4.Econometric results 5.Conclusions

5. Veenhoven’s (2000) taxonomy of QoL

6. Livability of person’s environment Person’s life- abilities Person’s appreciation of her life Utility of person’s life Person is within favorable conditions for living her life well. Conditions foster her QoL results Person is in possession of useful /valuable capacities Capacities of value to others and to herself A life that contributes to the well-being of others Relational goods, economic goods, other direct contributions Person’s judgment about her life as good Cognitive, affective, hedonic factors Chances Results Outer Inner

7. Focus on two QoL dimensions and their relationship with migration

8. Outline 1.The four dimensions of “Quality of Life” 2.Livability and migration 3.Satisfaction with life, vulnerabilities and migration 4.Econometric results 5.Conclusions

9. Outer quality of life chances: Livability Rojas (2008) The external conditions or environmental opportunities that are assumed to be relevant for living a good life Three livability areas Economic livability Social livability Political livability

10. Outer quality of life chances Livability Yearly GNP growth Yearly inflation rate Per capita GNP Gini Coefficient People below poverty line Economic index

11. Public expenditure on health Public expenditure on education Social contributions Subsidies and other transfers Social index Outer quality of life chances Livability

12. Political rights Civil Freedoms Voice and accountability Political stability Rule of law Control over corruption Political index Outer quality of life chances Livability

13. Variables from various sources Country-level variables Categories Ordinal codification: 1 to 6 Aggregation by livability area: mean values Three livability-area indicators »Economic, social, and political –Overall livability indicator Outer quality of life chances Livability

14. 1/3 Economic Index 1/3 Social Index 1/3 Political Index = Overall livability Index Continuous on scale of 1 to 6 Country level variable Outer quality of life chances Livability

16. Livability and net outflow of emigrants (% pop.): Averages for 1995, 2000, and 2005

17. Livability and net outflow of emigrants (rankings): Averages for 1995, 2000, and 2005

18. Livability ranking and percentage of population living abroad in 2005

19. Livability and remittances as percentage of GDP: 2005

20. Outline 1.The four dimensions of “Quality of Life” 2.Livability and migration 3.Satisfaction with life, vulnerabilities, and migration 4.Econometric results 5.Conclusions

21. Veenhoven’s taxonomy of QoL

22. Data Gallup World Poll (2006 and 2007), 132 countries. –Sample: cross section; around 1000 individual observations per country. Latinobarómetro survey (1995-2005), 18 LAC countries. –Sample: representative of 100% of population in all countries but Chile (70%).

23. We focus on three measures of perceived wellbeing from the Gallup Survey and one from Latinobarómetro Gallup World Poll 1.Overall satisfaction with life (ladder question): From zero to ten, where do you personally feel at this time, assuming that the higher score the better you feel about your life, and the lower score the worse you feel about it? 2.Satisfaction with living standards: Are you satisfied or dissatisfied with your standard of living, all the things you can buy and do? 3.Satisfaction with freedom: [In your country] Are you satisfied with the freedom to choose what you do with your life? Latinobarómetro 1.Overall satisfaction with life: In general terms, how satisfied are you with your life? (1) Very satisfied, (2) fairly satisfied, (3) satisfied or (4) not very satisfied.

24. Life satisfaction (ladder question) Note: Black bar is average value, white bar is standard deviation. Source: Authors’ calculations using Gallup World Poll wave 2007.

25. Box Plot of (current) life satisfaction measure or ladder question Source: Authors’ calculations using Gallup World Poll wave 2007.

26. Satisfaction with living standards Note: Black bar is average value, white bar is standard deviation. Source: Authors’ calculations using Gallup World Poll wave 2007.

27. Life Satisfaction – Latinobarómetro, waves 2001, 2003 and 2004 Source: Authors’ calculations using Latinobarómetro waves 2001, 2003 and 2004 ; Notes: first bar is “not satisfied at all with one’s life”, second bar “not much satisfied”, third bar “quite satisfied” and, fourth bar “very satisfied”

28. Recent interest in the relation of perceived wellbeing and income Wealthier people are, on average, happier than poor ones (Easterlin, 1974; Oswald, 1997; Diener et al, 2003). Easterlin Paradox: Wealthier countries are found to be happier than poor ones but happiness seems to rise with income up to a point, but not beyond it. However, Deaton (2007) using the 2006 Gallup Poll shows that across countries average happiness is strongly related to per capita national income. This would rule out the existence of a critical level of per capita income above which income has no further effect on happiness.

29. Life satisfaction, GDP per capita and age Note: Deaton (2007).

30. Not just income: the role of insecurity Deprivation tends to reduce happiness, but very poor people can be happier than other groups. The wellbeing of those who escaped poverty is often undermined by insecurity associated to the risk of falling back to poverty. –For these individuals, reported well-being is often lower than that of the poor (Graham and Pettinato, 2002). In particular, the issue we want to study is how insecurity at different levels affects perceived well-being. We focus on three measures of insecurity: nutritional, personal, and income insecurity.

31. Strategy We want to know which type of insecurity (nutritional, personal, and income) plays a greater role. A few caveats: –Interconnections between measures of insecurity (likely to confound results) –Selection issues (job insecurity proxies are defined only for those who work). We first study the relationship between perceived well-being and each of the types of insecurity in isolation, and then study of the relative importance of different types of insecurity in an unified framework. Secondly, we analyze if migration (or having a migrant relative or friend to rely on) is related to wellbeing and if attenuates (or amplify) the relationship between insecurities and wellbeing.

32. Outline 1.The four dimensions of “Quality of Life” 2.Livability and migrations 3.Satisfaction with life, vulnerabilities and migration 4.Econometric results 5.Conclusions

33. Nutritional insecurity Have there been times in the past twelve months when you did not have enough money to buy food that you or your family needed? (NI money, not enough money) Have there been times in the past 12 months when you or your family have gone hungry? (NI hungry, gone hungry)

34. “Have there been times in the past twelve months when you did not have enough money to buy food that you or your family needed?” (proportion that answered YES) Source: Authors’ calculations using Gallup World Poll wave 2007.

35. “Have there been times in the past 12 months when you or your family have gone hungry?” (proportion that answered YES) Source: Authors’ calculations using Gallup World Poll wave 2007.

36. Nutritional insecurity by income quintiles Note: For each income quintile first bar is “nutins money”, second=”nutins hungry”. Source: Authors’ calculations using Gallup World Poll wave 2007.

37. Income (job) insecurity Do you think you could lose your job in the next six months? (job_insec) How worried you are of losing your job or staying unemployed in the next 12 months? “Not worried”, “Just a bit worried”, “Worried”, “Very worried” (Latinobarómetro) Do you think the labour regulation protects workers in this country? “Not protected at all”, “just a bit protected”, “Quite protected”, “Very protected” (Latinobarómetro) From 1 to 10 where 1 is “completely secure” “ and 10 is “no job security at all” how much job security do you feel you have currently? … you had 5 years ago? (Latinobarómetro)

38. “Do you think you could loose your job in the next six months?” (proportion that answered YES) Source: Authors’ calculations using Gallup World Poll wave 2007.

39. Income/job insecurity by income quintiles Source: Authors’ calculations using Gallup World Poll wave 2007.

40. Personal insecurity Do you feel safe walking alone at night in the city or area where you live? (safe walking) Have you had money or property stolen from you or another household member within the past 12 months? (stolen) Have you been assaulted or mugged within the past 12 months? (mugged) Are there gangs in the area where you live? (2007) (gangs) Are there illicit drug trafficking or drug sales in the area where you live? (2007) (drug)

41. “Do you feel safe walking alone at night in the city or area where you live?” (proportion that answered YES) Source: Authors’ calculations using Gallup World Poll wave 2007.

42. “Have you had money or property stolen from you or another household member within the past 12 months?” (proportion that answered YES) Source: Authors’ calculations using Gallup World Poll wave 2007.

43. “Have you been assaulted or mugged within the past 12 months?” (proportion that answered YES) Source: Authors’ calculations using Gallup World Poll wave 2007.

44. “Are there gangs in the area where you live?” (proportion that answered YES) Source: Authors’ calculations using Gallup World Poll wave 2007.

45. “Are there illicit drug trafficking or drug sales in the area where you live?” (proportion that answered YES) Source: Authors’ calculations using Gallup World Poll wave 2007.

46. Victimization indicators by income quintiles Note: For each income quintile first bar is “safe walking”, second=”stolen”, third=”mugged”, 4=”gangs”, 5=”drug”. Source: Authors’ calculations using Gallup World Poll wave 2007.

47. Incidence of different types of insecurities in Latin America Source: Authors’ calculations using Gallup World Poll 2007 wave.

48. Migration related questions Have any members of your household, aged 15 to 60, gone to live in a foreign country permanently or temporarily in the past five years? –Two variables: family abroad 1 (yes, still there), family abroad 2 (yes, still there and yes, has returned) Do you have relatives or friends who are living in another country whom you can count on to help you when you need them, or not? (help from abroad) Is the city or area where you live a good place or not for immigrants from other countries?

49. Migration related questions in Gallup Note: Black bar is average value, white bar is standard deviation. Source: Authors’ calculations using Gallup World Poll 2007 wave.

50. “Have any members of your household, aged 15 to 60, gone to live in a foreign country permanently or temporarily in the past five years?” (proportion that answered YES, still there) Source: Authors’ calculations using Gallup World Poll 2007 wave.

51. “Have any members of your household, aged 15 to 60, gone to live in a foreign country permanently or temporarily in the past five years?” (proportion that answered YES, still there and returned) Source: Authors’ calculations using Gallup World Poll 2007 wave.

52. “Do you have relatives or friends who are living in another country whom you can count on to help you when you need them, or not” (proportion that answered YES) Source: Authors’ calculations using Gallup World Poll 2007 wave.

53. “Is the city or area where you live a good place or not a good place to live for immigrants from other countries” (Proportion that answered good place) Source: Authors’ calculations using Gallup World Poll 2007 wave.

54. Migration related questions by income quintile Source: Authors’ calculations using Gallup World Poll wave 2007; Notes: first bar is “family abroad1”, second bar “family abroad2”, third bar “help from abroad”, fourth bar “good place for immigrants”.

55. Types of insecurities according to “help from abroad” question - Gallup Source: Authors’ calculations using Gallup World Poll wave 2007; Notes: first bar is Nutritional insecurity “not enough money”; second bar job insecurity, third bar “have you been mugged?” fourth “are there gangs in the area where you live”.

56. Job insecurity and “Did you and your family seriously considered that you all could live abroad?” - Latinobarómetro Source: Authors’ calculations using Latinobarometro waves 2002, 2003 and 2004: ; Notes: first bar is “not worried at all of losing one’s job”, second bar “just a bit worried”, third bar “Worried” and, fourth bar “very worried”.

57. Outline 1.The four dimensions of “Quality of Life” 2.Livability and migrations 3.Satisfaction with life, vulnerabilities and migration 4.Gallup World Poll and Latinobarómetro 5.Econometric results 6.Conclusions

58. Life satisfaction decreases with nutritional insecurity… Source: Authors’ calculations using Gallup World Poll wave 2006.

59. …and with victimization… Source: Authors’ calculations using Gallup World Poll wave 2006.

60. But increases if person has a relative or friend abroad he can count on Source: Authors’ calculations using Gallup World Poll wave 2007.

61. Analytical framework where i means country averages or individuals t refers to wave 2006, 2007 Y = measures of perceptions of well-being INS = various measures of insecurity (nutritional, job, personal) M = migration related variables (relative abroad, can count on help from abroad and considers city a good place for immigrants) EXP = alternative (to nutritional insecurity) explanatory variables X = control variables e = error term

62. Some methodological issues Categorical variables (such as the ladder question): neglects cardinal information of the question. A “7”, could be either a 6.8 or a 7.2. COLS and POLS procedure: cardinalizes original satisfaction variable, POLS is used for non-numeric categories (both based on Van Praag and Ferrer-i-Carbonell, 2008). –Main results hold An additional (and more critical) issue: self-reported satisfaction might be affected by unobserved individual personality traits (optimism and pessimism, mood on the day of the interview, among others), biasing the results. Routine to capture individual traits (also based on Van Praag and Ferrer-i-Carbonell, 2008). –Regress several satisfaction related questions on same set of covariates, use principal components method to obtain common factor of residuals (that should include this unobservable traits), and use it as a control.

63. Life satisfaction (ladder question) and types of insecurities - Gallup, individual data, 2007 Notes: Standard errors clustered at country level; Country and time fixed effects are included; Controls included: income Gallup brackets; income country: countries grouped in 6 categories (high_income_OECD; high_income_nonOECD; low_income; lower_middle_income; upper_middle_income); Age categories.

64. Other dimensions of life satisfaction and types of insecurities – Gallup, individual data, 2007 Notes: Standard errors clustered at country level; Country and time fixed effects are included; Controls included: income Gallup brackets; income country: countries grouped in 6 categories (high_income_OECD; high_income_nonOECD; low_income; lower_middle_income; upper_middle_income); Age categories.

65. Life satisfaction (ladder question) and migration – Gallup, individual data Notes: Standard errors clustered at country level; Country and time fixed effects are included; Controls included: income Gallup brackets; income country: countries grouped in 6 categories (high_income_OECD; high_income_nonOECD; low_income; lower_middle_income; upper_middle_income); Age categories.

66. Satisfaction with living standards (1 if satisfied) and migration – Gallup, individual data Notes: Standard errors clustered at country level; Country and time fixed effects are included; Controls included: income Gallup brackets; income country: countries grouped in 6 categories (high_income_OECD; high_income_nonOECD; low_income; lower_middle_income; upper_middle_income); Age categories.

67. Satisfaction with freedom to choose (1 if satisfied) and migration – Gallup, individual data Notes: Standard errors clustered at country level; Country and time fixed effects are included; Controls included: income Gallup brackets; income country: countries grouped in 6 categories (high_income_OECD; high_income_nonOECD; low_income; lower_middle_income; upper_middle_income); Age categories.

68. Life satisfaction (ladder question), migration and types of insecurities – Gallup, individual data Notes: Standard errors clustered at country level; Country and time fixed effects are included; Controls included: income Gallup brackets; income country: countries grouped in 6 categories (high_income_OECD; high_income_nonOECD; low_income; lower_middle_income; upper_middle_income); Age categories.

69. Satisfaction with living standards, migration and types of insecurities – Gallup, individual data Notes: Standard errors clustered at country level; Country and time fixed effects are included; Controls included: income Gallup brackets; income country: countries grouped in 6 categories (high_income_OECD; high_income_nonOECD; low_income; lower_middle_income; upper_middle_income); Age categories.

70. Life satisfaction (ladder question), migration and types of insecurities – Gallup, individual data

71. Satisfaction with living standards, migration and types of insecurities – Gallup, individual data

72. Life satisfaction and migration (proxy “Have you and your family considered to move abroad?”) Latinobarómetro, waves 2002, 2003 y 2004 Notes: Standard errors clustered at country and year level; Sample: waves 2002, 2003 and 2004 for column 1 and 2, only 2003 and 2004 for column 3 and 4; “Worried to lose your job” measure goes from 1 (least worried) to 4 (most worried); Control variable for health satisfaction is a scale of satisfaction with health status (from 0 to 4); “social networks” refer to a question asking whether the respondent trusts other people; Controls included: country fixed effects, socio-economic level of respondent (as reported by the interviewer), type of job of head, number of assets, dummy for whether respondent is interested in politics.

73. Wellbeing and attitude towards immigrants– Gallup, individual data Notes: Standard errors clustered at country level; Country and time fixed effects are included; Controls included: income Gallup brackets; income country: countries grouped in 6 categories (high_income_OECD; high_income_nonOECD; low_income; lower_middle_income; upper_middle_income); Age categories.

74. Outline 1.The four dimensions of “Quality of Life” 2.Livability and migrations 3.Satisfaction with life, vulnerabilities and migration 4.Econometric results 5.Conclusions

75. Conclusions Nutritional, income (job) and personal insecurity negatively affect life satisfaction. Households with migration experience seem to have greater life satisfaction. This result is robust to taking into account several potentially important determinants of life satisfaction (income measures, health status, unemployment and availability of social networks). Evidence suggests that the nutritional insecurity is the component that plays the biggest role. The effect of job insecurity is still significant but smaller in magnitude.

76. Conclusions Migration related questions do not seem to have any relationship with individuals’ perception on their freedom to choose. Results hold, even when the different types of insecurities are included in the analysis. Finally, migration offsets nutritional insecurity, but amplifies job insecurity.