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Rebecca Galloway, Fulbright to the Netherlands for Economics

  • Statement of Proposed Study

    Rebecca Galloway, Netherlands, Economics

    I hope to pursue an intensive, one-year, master’s degree program in international economic studies at the Universiteit Maastricht, specializing in “labor markets, human resources, and society.” The program consists of two terms with a total duration of thirty-six weeks; the last ten weeks will be dedicated solely to master thesis work, although I plan to begin my research immediately and dedicate the entire twelve-month timeframe to my thesis project. The topic of my thesis will be non-western immigrant inflow and its effects on native-born labor outflow, unemployment rates, and wage rates in Rotterdam.

    My studies at the Universiteit Maastricht will include economic theory and applied economics. I will learn valuable background information in a specialized field through lectures, group work, and case studies. The international economics degree offers a specific course on the sociology of immigration which makes the program very attractive for my research. Moreover, the university is renowned for its unique Problem-based Learning (PBL) system, which focuses on generating students that are “independent, enterprising problem-solvers.” In addition to the challenging exercises in critical thinking and problem-solving, students are presented with skills training sessions, and the program is taught entirely in English and thus attracts a very international base of students. I am confident that the master’s degree I will receive from the Universiteit Maastricht will be very valuable to me in future research endeavors and in the workforce.

    The Netherlands has always been labeled as one of the most liberal and tolerant countries in the world. Recently, however, an issue arose leading the Dutch people to reconsider their immigration policy: migrants attracted to the country’s strong multicultural acceptance and attractive living conditions were coming in significant numbers to find work and reside in the Netherlands. For example, the city of Rotterdam is now composed of around 60 percent non-native residents and 40 percent Dutch natives (Sullivan, 2005). Many of these immigrants are either low-skilled or having difficulties finding employment. In fact, the poverty levels in large cities like Amsterdam and Rotterdam are continually increasing due to certain issues like immigrant employment market isolation. Immigrant families contribute toward roughly 30 percent of the Netherlands’ poor, and many of them cannot speak Dutch and sometimes are confronted with discrimination (Vrooman and Hoff, 2004). The Netherlands also has to worry about providing education, housing, and medical assistance to the incoming immigrants, who may not be able to provide for themselves initially. Factors such as these are leading citizens to question whether additional immigrants yield an economic benefit or loss in urban areas of the country.

    Roodenburg et al. (2003) conducted a study on immigration and the Dutch economy which examined all aspects of the economy, including the labor market, the public sector, and the physical environment. Additionally, the authors took Dutch studies conducted in the past on immigration and the economy and created a synthesis of the conclusions drawn by various Dutch economists. Their analysis indicated high-skilled immigrant inflow had been quite beneficial economically, but the economic rewards resulting from the large population of low-skilled laborers coming from abroad remained less apparent. Regarding labor migration, “the position of the Dutch government so far has been that immigration is not a suitable policy response to population aging in the Netherlands” (Roodenburg et al., 2003). The authors suggest that a more successful policy would be selectivity with regards to the economic potential of immigrants. Economic analyses vis-à-vis short-term immigration implications like these, along with the numerous political facets of the immigration issue (integration, crime, poverty, etc.), have led Dutch government officials to form a new policy.

    Up until the early 1990s, the Netherlands always welcomed immigrants and abided by a policy which ensured a fixed minimum amount of asylum seekers, refugees, and temporary workers entrance into the country. While the Dutch government has not limited the number of immigrants, in October and November 2004 it passed the “Dutch Work and Benefit Act” along with a new high-skilled immigrant policy which will lead to a high-skilled migrant admittance bias. The age and income requirements for foreigners coming into the Netherlands for family formation or reunion have been adjusted such that these immigrants must be at least twenty-one years of age (instead of eighteen), and they must earn 120 percent of the Dutch minimum wage (rather than 100 percent). In addition to this stricter regulation, the ability of highly skilled immigrants to be admitted into the Netherlands has increased due to the fact that they no longer need a work permit to be employed in a Dutch company or reside in the Netherlands.

    Although this policy was just implemented less than a year ago and its success cannot yet be assessed, I am uncertain as to whether or not this adjustment will resolve any economic problems correlated with immigration. In fact, there have not been enough in-depth studies completed in the Netherlands to compose a truly sound policy. According to Roodenburg et al.’s analysis of Dutch studies in the past, low-skilled immigration is associated with higher unemployment rates and lower wage rates within the Netherlands. Therefore, the goal of my research is to test the legitimacy of the assumption that wage rates decrease and unemployment rates increase upon the inflow of low-skilled immigrants into the Netherlands. I will accomplish this by looking at the relationship between immigrant inflow and unemployment and wage rates over a twenty-year period in Rotterdam.

    I am currently working on an empirical study which involves non-western immigration and its effects on native-born labor migration out of major metropolitan areas in Europe, including Amsterdam and Rotterdam. Although no studies on this topic have been conducted, many of them have been done in the United States. According to Borjas (2005), around 40 percent of America’s immigrants are concentrated in four metropolitan areas (New York, Los Angeles, Chicago, and San Francisco), just as immigrants are concentrated in Rotterdam, Amsterdam, Paris, Berlin, etc. Borjas, along with many other American economists, has analyzed the effects of immigration into metropolitan areas (where immigrant concentration is highest) on internal native-born migration, wage rates, and unemployment rates. In spite of the numerous studies completed, the results vary and depend on the type of empirical analysis performed. I intend to parallel my research this year in econometrics and next year in the Netherlands with studies already completed in the United States to see if I obtain equally mixed results, or if there is perhaps a certain aspect of the Dutch economy that is obviously positively or negatively correlated to the large number of low-skilled labor entering the country. I will be able to use data already available through the university in order to conduct a time series econometric analysis on immigrant inflow into Rotterdam.

    When I am finished with my project and my studies, having received a Master of Science in International Economic Studies, I will have an impressively increased knowledge base in my desired field of work in addition to a better understanding of immigration and its economic implications. I hope to continue my research through a doctoral program in economics and policy analysis and either teach at the university level or work for an American governmental institution. My goal is not only to acquire new knowledge on the immigration dilemma while in Maastricht, but also be able to apply my knowledge in the work world when faced with similar economic issues.

    Borjas, George J. “Native Internal Migration and the Labor Market Impact of Immigration.” National Bureau of Economic Research (2005): 1-64.

    Roodenburg et al. “Immigration and the Dutch Economy.” CPB Netherlands Bureau for Economic Policy and Analysis (2003): 1-121.