The Value of Diplomacy: Bilateral Relations and Immigrant Well-Being

47 Pages Posted: 1 Apr 2011

See all articles by Leonardo Becchetti

Leonardo Becchetti

University of Rome Tor Vergata - Faculty of Economics

Andrew Clark

Paris School of Economics (PSE); IZA Institute of Labor Economics

Elena Giachin Ricca

University of Rome Tor Vergata

Date Written: March 31, 2011

Abstract

This paper attempts to establish the value of good relationships between countries by considering their effect on a group of individuals who are arguably intimately affected by them: immigrants. We appeal to an index of conflict/cooperation which is calculated as an annual weighted sum of news items between two countries. This index is matched to a sample of immigrants to Germany in the SOEP data. The index of bilateral relations thus exhibits both time-series and cross-section variation. Good relations are positively and significantly correlated with immigrant life satisfaction, especially when we downplay low-value news events. This significant effect is much stronger for immigrants who have been in Germany longer, and who expect to stay there forever. This is consistent with good relations directly affecting the quality of immigrants’ lives in the host country, but is not consistent with assimilation. There is thus a significant value to diplomacy: good relationships between home and host countries generate significant well-being externalities for those who live abroad.

Keywords: Migration, bilateral relations, life satisfaction, assimilation, diplomacy

JEL Classification: F5, F22, I31

Suggested Citation

Becchetti, Leonardo and Clark, Andrew Eric and Giachin Ricca, Elena, The Value of Diplomacy: Bilateral Relations and Immigrant Well-Being (March 31, 2011). CEIS Working Paper No. 190. Available at SSRN: https://ssrn.com/abstract=1800098 or http://dx.doi.org/10.2139/ssrn.1800098

Leonardo Becchetti (Contact Author)

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia, 2
I-00133 Rome
Italy

Andrew Eric Clark

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Elena Giachin Ricca

University of Rome Tor Vergata ( email )

Via di Tor Vergata
Rome, Lazio 00133
Italy

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