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Can we use NEG models to predict migration flows? An example of CEE accession countries

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  • d’Artis Kancs

Abstract

In this paper we develop an analytically solvable and structurally estimable economic geography model and apply it to predict migration flows for the period following the CEE’s integration with the EU. The main innovation of our approach is that it endogenises both explanatory variables and the migration rate. The underlying structural parameters are estimated econometrically using a migration equation, which is derived entirely from the theoretical NEG model. Our simulations show that even relatively moderate changes in some of the explanatory variables (such as transport costs) can actuate unpredictable changes (both in sign and magnitude) in other explanatory variables (such as wages). Keeping these explanatory variables fixed, as in reduced-form models, would produce biased results. Our empirical findings advocate that there is enough evidence to predict a selective migration among the three Baltic States. However, labour mobility in the Baltic countries is sufficiently low to make the swift emergence of a core-periphery pattern very unlikely at this geographical level.

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Bibliographic Info

Paper provided by Economics and Econometrics Research Institute (EERI), Brussels in its series EERI Research Paper Series with number EERI_RP_2005_01.

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Length: 35 pages
Date of creation: Jan 2005
Date of revision:
Handle: RePEc:eei:rpaper:eeri_rp_2005_01

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Keywords: Migration; economic geography; European regions; integration;

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References

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  1. De New, John P & Zimmermann, Klaus F, 1994. "Native Wage Impacts of Foreign Labor: A Random Effects Panel Analysis," Journal of Population Economics, Springer, Springer, vol. 7(2), pages 177-92.
  2. Phillip B. Levine & David J. Zimmerman, 1999. "An empirical analysis of the welfare magnet debate using the NLSY," Journal of Population Economics, Springer, Springer, vol. 12(3), pages 391-409.
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  4. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  5. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," NBER Working Papers 5098, National Bureau of Economic Research, Inc.
  6. Matthieu Crozet, 2004. "Do Migrants Follow Market Potentials? An Estimation of a New Economic Geography Model," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers), HAL halshs-00096277, HAL.
  7. Zaka Ratsimalahelo, 2001. "Rank Test Based On Matrix Perturbation Theory," EERI Research Paper Series, Economics and Econometrics Research Institute (EERI), Brussels EERI_RP_2001_04, Economics and Econometrics Research Institute (EERI), Brussels.
  8. Bauer, Thomas K. & Zimmermann, Klaus F., 1999. "Occupational Mobility of Ethnic Migrants," IZA Discussion Papers 58, Institute for the Study of Labor (IZA).
  9. Fertig, Michael & Schmidt, Christoph M, 2001. "First- and Second-Generation Migrants in Germany - What Do We Know and What Do People Think," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2803, C.E.P.R. Discussion Papers.
  10. Thierry Mayer & Keith Head, 2003. "The Empirics of Agglomeration and Trade," Working Papers, CEPII research center 2003-15, CEPII research center.
  11. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, American Economic Association, vol. 60(1), pages 126-42, March.
  12. Michael Fertig, 2001. "The economic impact of EU-enlargement: assessing the migration potential," Empirical Economics, Springer, Springer, vol. 26(4), pages 707-720.
  13. d’Artis Kancs & Julda Kielyte, 2002. "Migration in the Enlarged European Union: Empirical Evidence for Labour Mobility in the Baltic States," EERI Research Paper Series, Economics and Econometrics Research Institute (EERI), Brussels EERI_RP_2002_04, Economics and Econometrics Research Institute (EERI), Brussels.
  14. repec:fth:iniesr:430 is not listed on IDEAS
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Cited by:
  1. d'Artis Kancs & Julda Kielyte, 2010. "Education in the East, Emigrating to the West?," EERI Research Paper Series, Economics and Econometrics Research Institute (EERI), Brussels EERI_RP_2010_01, Economics and Econometrics Research Institute (EERI), Brussels.
  2. Rafael González-Val & Daniel A. Tirado Fabregat & Elisabet Viladecans-Marsal, 2013. "Market potential and city growth : Spain 1860-1960," Working Papers in Economic History, Universidad Carlos III, Departamento de Historia Económica e Instituciones wp13-04, Universidad Carlos III, Departamento de Historia Económica e Instituciones.
  3. Chen, Xi & Zhou, Bin & Zhong, Funing, 2010. "Do Consumers Really Care about Genetically Modified (GM) Food Label? What Do We Know? What Else Should We Know?," Journal of Economics and Econometrics, Economics and Econometrics Research Institute (EERI), Brussels, Economics and Econometrics Research Institute (EERI), Brussels, vol. 53(2), pages 32-56.
  4. James Anderson, 2001. "Migration, FDI, and the Margins of Trade," EERI Research Paper Series, Economics and Econometrics Research Institute (EERI), Brussels EERI_RP_2001_05, Economics and Econometrics Research Institute (EERI), Brussels.
  5. Ana Paula Martins, 2010. "Splitting Games: Nash Equilibrium and the Optimisation Problem," EERI Research Paper Series, Economics and Econometrics Research Institute (EERI), Brussels EERI_RP_2010_36, Economics and Econometrics Research Institute (EERI), Brussels.
  6. Anderson, James, 2011. "Migration of Labor in Europe. Theory and Evidence," Working Papers of Institute for Economic Forecasting, Institute for Economic Forecasting 110427, Institute for Economic Forecasting.
  7. d'Artis Kancs & Julia Kielyte, 2010. "European Integration and Labour Migration," EERI Research Paper Series, Economics and Econometrics Research Institute (EERI), Brussels EERI_RP_2010_27, Economics and Econometrics Research Institute (EERI), Brussels.

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