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Does international migration impact economic institutions at home?

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  • Gautam, Durga P.

Abstract

This paper investigates and exploits the exogenous variation in the number of a country's migrants abroad driven by regional and global trade integration to estimate the impact of international migration on economic institutions at home. While the significance of the country's geographical orientation in cross-border migration is well-documented, time-invariant geographic variables are eliminated by panel models with fixed-effects. Exploiting the time-varying joint effect of geography and trade on international migration that allows to account for both endogeneity and unobserved heterogeneity, this study finds evidence of adverse impacts of international migration on the home-country's economic institutions, with large negative estimates for the countries that are grappling with weak political institutions. The results are robust to alternative model specifications and estimation methods. In addition, this paper offers no empirical support for the recent claims that the effect of emigration on institutional quality is destination-specific.

Suggested Citation

  • Gautam, Durga P., 2021. "Does international migration impact economic institutions at home?," European Journal of Political Economy, Elsevier, vol. 69(C).
    • Handle: RePEc:eee:poleco:v:69:y:2021:i:c:s0176268021000082
    DOI: 10.1016/j.ejpoleco.2021.102007
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    More about this item

    Keywords

    International migration; Institutions; Trade integration; Economic freedom;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • F15 - International Economics - - Trade - - - Economic Integration
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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