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Efficiency gains from liberalizing labor mobility

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  • Frédéric DOCQUIER

    ()
    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and FNRS)

  • Joël MACHADO

    ()
    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

  • Khalid SEKKAT

    ()
    (Economic Research Forum and Université Libre de Bruxelles)

Abstract

This paper quantifies the effect of a complete liberalization of international migration on the world GDP and its distribution across regions. We build a general equilibrium model endogenizing bilateral migration and wage disparities between and within countries. A dual strategy is developed to identify total migration costs and their legal component. Contrary to existing studies, we obtain limited efficiency gains. Accounting for incompressible moving costs strongly reduces the benefits from liberalization. When we account for endogenous productivity, congestion, heterogeneous education quality, imperfect substitution between migrants and natives, and network effects, efficiency gains reach about 4 percent of the world GDP.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 2012023.

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Length: 42
Date of creation: 30 Oct 2012
Date of revision:
Handle: RePEc:ctl:louvir:2012023

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Cited by:
  1. Marco DELOGU & Frédéric DOCQUIER & Joël MACHADO, 2013. "The dynamic implications of liberalizing global migration," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2013029, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  2. Julian di Giovanni & Andrei Levchenko & Francesc Ortega, 2012. "A Global View of Cross-Border Migration," CReAM Discussion Paper Series 1218, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  3. Biavaschi, Costanza & Elsner, Benjamin, 2013. "Let's Be Selective about Migrant Self-Selection," IZA Discussion Papers 7865, Institute for the Study of Labor (IZA).

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