With his inaugural lecture on the importance of experimental evidence for social science research, Steven Stillman entered the University of Bolzano as a new Professor of Economics. After working as a researcher at different institutes in New Zealand, such as the Centre for Research and Analysis of Migration or the Institute for the Study of Labour, and as Professor of Economics at the University of Otago, he finally moved to Italy. In the interview Mr. Stillman is going to talk about his way to the University of Bolzano, his research-focus on the benefits of migration and why economic studies are more than just about markets, but do as well contain a social spirit.

Mr Stillman, after working as a professor at the University of Otago in New Zealand, what brought you to Bolzano and what especially attracted you to this University?

I have a number of co-authors in Switzerland and Austria, and also enjoy spending time in the mountains, so when I decided to look for jobs in Europe, I targeted universities in the “Alpine” region. I was particularly attracted to Bolzano and unibz because of the multicultural nature of the region and the university, and because the university offers very good working conditions.

In your Inaugural Lecture you talked about the importance of Evidence for Social Science research. As a professor of Economics, how do you establish the interface between the social and economic area?

I think most people in the general public have a mistaken belief that ‘economics’ is only about studying markets and economic growth. Economics is, in fact, much broader than that. As economists we are interested in understanding how people, firms and governments make decisions when faced with choices between different options. For example, I have done a lot of research looking at why people choose to move to a new country and what impact this has on their life, their family and on the country to which they move. In another example, one of my colleagues at unibz, Professor Mirco Tonin, has done research looking at why people give money to charities and how charities can increase the donations they receive by altering their message. Throughout the world, many economists are working on social questions!

How important do you consider empirical evidence in social science and why? Would you say that this applies primarily to social science or does your thesis equally describe natural science?

I think empirical evidence is crucial for understanding how the world works in both the social and natural sciences. Of course, there are areas where collecting empirical evidence is difficult, for example in the study of black holes, and hence there is a role for theoretical models as well. Traditionally, economists relied predominately on theory to make predictions about how different decisions or policies would lead to different outcomes. However, in the last thirty years, the computer revolution has made it much easier to both collect and analyse data and now as a profession we use both empirical evidence and theory to help understand how the world works. In this regard, we are becoming more like the natural science where empirical evidence has been important for centuries.

What exactly do you mean by experimental Evidence?

Empirical evidence as I see it, is about using data and statistical methods to understand how decisions are made and what impacts these decisions have had, by looking at these decisions after they have been made. For example, if I want to know how migration has impacted people’s lives, I need to examine different outcomes for migrants and compare them to these outcomes for other equivalent people who did not migrate. Finding the equivalent people to compare them to is the difficult part that requires economists to be clever.

For example, my research on migration has focused on a particular migration stream that allows a limited number of individuals to migrate from certain Pacific Island countries to New Zealand. More people that are allowed to migrate apply for this quota each year and the New Zealand government uses a randomized ballot to choose who can move. Hence, this policy creates a group of people who want to move to New Zealand but are not allowed to only because of bad luck and hence are equivalent to the lucky people who can move to New Zealand via this migration stream. My co-authors and I have collected extensive data on individuals from both these groups and hence can examine how migration has changed people’s lives in a scientific manner.

Your research focuses on labour economics. What specific fields does this science comprise?

Labour economists study a wide variety of areas related to individual and firm decision-making. Very traditional areas include examining why people decide to work, how they decide which jobs to take, what determines how well they do at these jobs, how do firms decide whom to hire and what impact this has on them. This is called the study of labour supply and labour demand and a lot of research in this area looks at the role of institutions, such as unions, and government policy, such as taxes, minimum wage and pension rules. Labour economists also work extensively on understanding how people invest in themselves, in particular the decisions they make around education and health. Immigration is another type of ‘investment’ that labour economists study. We also look at more ‘social’ investments, such as decisions around cohabitation, marriage and childbearing.

What lectures and courses can the students expect from you in the next Semesters? What areas will you be focusing on?

I teach three courses at the unibz. In our Masters in Economics and Management of the Public Sector program, I teach both Public Economic, which is about the interaction between government policy and individual decision making, and Economic Policy and Government Intervention, which takes a more in-depth focus on two areas of government policy that I think are particularly important in current public discussions, immigration and inequality. I also teach the first year Microeconomics course in the Bachelor in Economics and Management program. This is the first economics course that students in that program take so my focus is on trying to get them excited about economics.

You conducted considerable research about the impact of economic policy on human behaviour. What were your primary findings?

I work on a lot of areas so it isn’t really possible to list my primary findings. One thing that most of my work has in common is that it shows that individuals are responsive to changes in government policies, but how they respond is often unpredictable. For example, I’ve done some work looking at the impact that lowering the drinking age in New Zealand from 20 to 18 had on youth drinking and, to the surprise of many people, my co-author and I did not find that this led to an increase in drinking for teenagers.

How have society’s expectations about economic policy changed over the recent years, considering the current economic recession

I am not sure if expectations have changed but it does seem as if people have gotten more frustrated by the inability of some economists (those that try) to predict the future accurately. As a profession, I don’t think we have done a very good job explaining what we are able to do well and what really isn’t possible.

Another aspect of your fields of academic interests is migration. In what way can economic analysis of migration contribute to the social sphere of the issue?

My research looks at both how individuals benefit from migration and how they impact their new country. Migration has huge impacts on people’s lives, especially if they move from poorer to richer countries. Not only are they richer, but they are happier and their kids have better lives. Generally, most research also finds that immigrants have positive impacts on their new country, bringing new ideas and helping to spur economic growth. This type of research also examines the barriers to integration, for example, the importance of learning the host country’s language or becoming a citizen. Hence, ‘economic’ research can tell us a lot about the ‘social’ side of migration.

In the new eBook Refugees and Economic Migrants-Facts, policies and challenges you have co-authored a chapter. The book summarizes the outcomes of economic research on the impact of migration in several areas of policymaking in Europe. Can you tell us a bit about the main findings? And on what evidence they are built upon?

The book covers many topics and is way too broad to summarize here. I can tell you a bit about my chapter. My co-authors and I try to answer the question of whether gains from migration increase as migrants assimilate. We study the long-term impacts of migration by comparing Tongans who had successful applications in the migration lottery that I discussed above, and who immigrated to New Zealand almost a decade ago, with unsuccessful applicants in this same lottery. We find that the long-term income gain for migrants is similar to that found in the first years after migration. That the income gain occurs immediately upon migrating to a richer country suggests that the same labour and skills can be vastly more productive when used with the institutions and complementary physical and human capital present in a developed country rather than in a developing country. Even though the income gain does not increase over time, it is so large that the lifetime benefit from migrating for the migrant and his or her accompanying spouse and children is enormous.

Would you consider Migration a positive factor contributing to states economy? Why (not)?

Yes, my research and the majority of other research on this topic finds that migration makes positive contributions to host countries and has huge positive impacts on the lives of migrants. From an economic point of view, migration is a win-win policy. However, it is obvious that there is a large social side to migration and that many people in the majority of countries, including those with long experiences with migration like the US, find it difficult to welcome new migrants who look different, eat different things, have different traditions, etc.  And in some case, new migrants find it difficult to adjust to how things are done in their new country and try to avoid integrating with the local population.

Personally, what I find most surprising is that the majority of countries spend a large amount of money trying to pick the best migrants through complicated screening processes and to keep out the ‘undesirables’, and then spend little to no money helping the chosen migrants to get settled and learn about their new country. I have now migrated to two countries in my life, New Zealand and Italy, which have very different approaches to picking migrants, and neither has offered any real help in getting settled in terms of explaining how local bureaucracy works or introducing local culture. Fortunately, I work with a large number of highly educated people who can help me figure out how things work, but, for many migrants, they really are on their own with few resources to help them get settled. The fact that the vast majority succeed is really a testament to the hard work and stubbornness of the average migrant.