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Migration and trade: Theory with an application to the Eastern-Western European integration

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Author Info
Iranzo, Susana
Peri, Giovanni

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Abstract

The remarkable increase in trade flows and in migratory flows of highly educated people are two important features of globalization of the last decades. This paper extends a two-country model of inter- and intra-industry trade to a rich environment featuring technological differences, skill differences and the possibility of international labor mobility. The model is used to explain the patterns of trade and migration as countries remove barriers to trade and to labor mobility. We parameterize the model to match the features of the Western and Eastern European members of the EU and analyze first the effects of the trade liberalization which occurred between 1989 and 2004, and then the gains and losses from migration which are expected to occur if legal barriers to labor mobility are substantially reduced. The lower barriers to migration would result in significant migration of skilled workers from Eastern European countries. Interestingly, this would not only benefit the migrants and most Western European workers but, via trade, it would also benefit the workers remaining in Eastern Europe.

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Publisher Info
Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 79 (2009)
Issue (Month): 1 (September)
Pages: 1-19
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Handle: RePEc:eee:inecon:v:79:y:2009:i:1:p:1-19

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Web page: http://www.elsevier.com/locate/inca/505552

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Related research
Keywords: Skilled migration Gains from variety Real wages Eastern-Western Europe;

Cited by:
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  1. Karin Mayr & Giovanni Peri, 2009. "Brain Drain and Brain Return: Theory and Application to Eastern-Western Europe," CReAM Discussion Paper Series 0911, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London. [Downloadable!]
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This page was last updated on 2009-11-22.

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