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A Global View of Cross-Border Migration

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  • Julian di Giovanni
  • Andrei Levchenko
  • Francesc Ortega

Abstract

This paper evaluates the global welfare impact of observed levels of migration using a quantitative multi-sector model of the world economy calibrated to aggregate and firm-level data. Our framework features cross-country labor productivity differences, international trade, remittances, and a heterogeneous workforce. We compare welfare under the observed levels of migration to a no-migration counterfactual. In the long run, natives in countries that received a lot of migration – such as Canada or Australia – are better off due to greater product variety available in consumption and as intermediate inputs. In the short run the impact of migration on average welfare in these countries is close to zero, while the skilled and unskilled natives tend to experience welfare changes of opposite signs. The remaining natives in countries with large emigration flows – such as Jamaica or El Salvador – are also better off due to migration, but for a different reason: remittances. The welfare impact of observed levels of migration is substantial, at about 5 to 10% for the main receiving countries and about 10% in countries with large incoming remittances. Our results are robust to accounting for imperfect transferability of skills, selection into migration, and imperfect substitution between natives and immigrants.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 20002.

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Date of creation: Mar 2014
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Handle: RePEc:nbr:nberwo:20002

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References

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  1. Bollard, Albert & McKenzie, David & Morten, Melanie & Rapoport, Hillel, 2009. "Remittances and the Brain Drain Revisited: The Microdata Show That More Educated Migrants Remit More," IZA Discussion Papers 4534, Institute for the Study of Labor (IZA).
  2. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, Elsevier, vol. 95(1), pages 42-57, May.
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  5. Hendricks, Lutz A., 2002. "How Important is Human Capital for Development? Evidence from Immigrant Earnings," Staff General Research Papers 11409, Iowa State University, Department of Economics.
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  7. Christian Dustmann & Itzhak Fadlon & Yoram Weiss, 2010. "Return Migration, Human Capital Accumulation and the Brain Drain," CReAM Discussion Paper Series 1013, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
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  15. Klein, Paul & Ventura, Gustavo, 2009. "Productivity differences and the dynamic effects of labor movements," Journal of Monetary Economics, Elsevier, Elsevier, vol. 56(8), pages 1059-1073, November.
  16. Julian di Giovanni & Andrei A. Levchenko, 2009. "Firm Entry, Trade, and Welfare in Zipf's World," Working Papers, Research Seminar in International Economics, University of Michigan 591, Research Seminar in International Economics, University of Michigan.
  17. Frédéric DOCQUIER & Joël MACHADO & Khalid SEKKAT, 2012. "Efficiency gains from liberalizing labor mobility," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2012023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  18. Libertad Gonzalez & Francesc Ortega, 2008. "How do Very Open Economies Absorb Large Immigration Flows? Recent Evidence from Spanish Regions," Development Working Papers 248, Centro Studi Luca d\'Agliano, University of Milano.
  19. Lídia Farré & Libertad González Luna & Francesc Ortega, 2009. "Immigration, family responsibilities and the labor supply of skilled native women," Economics Working Papers 1161, Department of Economics and Business, Universitat Pompeu Fabra.
  20. Gianmarco I. P. Ottaviano & Giovanni Peri, 2012. "Rethinking The Effect Of Immigration On Wages," Journal of the European Economic Association, European Economic Association, European Economic Association, vol. 10(1), pages 152-197, 02.
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  29. Yoko NIIMI & Caglar OZDEN & Maurice SCHIFF, 2010. "Remittances and the Brain Drain: Skilled Migrants Do Remit Less," Annales d'Economie et de Statistique, ENSAE, issue 97-98, pages 123-141.
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Citations

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Cited by:
  1. Frédéric DOCQUIER & Joël MACHADO & Khalid SEKKAT, 2012. "Efficiency gains from liberalizing labor mobility," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2012023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  2. Biavaschi, Costanza & Elsner, Benjamin, 2013. "Let's Be Selective about Migrant Self-Selection," IZA Discussion Papers 7865, Institute for the Study of Labor (IZA).
  3. Francesc Ortega & Giovanni Peri, 2012. "The Effect of Income and Immigration Policies on International Migration," NBER Working Papers 18322, National Bureau of Economic Research, Inc.
  4. Suzanne Kok, 2014. "Matching worker skills to job tasks in the Netherlands: sorting into cities for better careers," IZA Journal of European Labor Studies, Springer, Springer, vol. 3(1), pages 1-36, December.
  5. Francesc Ortega & Giovanni Peri, 2012. "The Role of Income and Immigration Policies in Attracting International Migrants," Working Papers, University of California, Davis, Department of Economics 1214, University of California, Davis, Department of Economics.
  6. Ortega, Francesc & Peri, Giovanni, 2014. "Openness and income: The roles of trade and migration," Journal of International Economics, Elsevier, Elsevier, vol. 92(2), pages 231-251.
  7. Michele Battisti & Gabriel Felbermayr & Giovanni Peri & Panu Poutvaara, 2014. "Immigration, Search, and Redistribution: A Quantitative Assessment of Native Welfare," NBER Working Papers 20131, National Bureau of Economic Research, Inc.
  8. Sara de la Rica & Albretch Glitz & Francesc Ortega, 2013. "Immigration in Europe: Trends, Policies and Empirical Evidence," Working Papers 2013-16, FEDEA.
  9. Ortega, Francesc & Peri, Giovanni, 2013. "Migration, Trade and Income," IZA Discussion Papers 7325, Institute for the Study of Labor (IZA).
  10. Giovanni Facchini & Tommaso Frattini & Cora Signorotto, 2013. "Mind What Your Voters Read: Media Exposure and International Economic Policy Making," Development Working Papers 358, Centro Studi Luca d\'Agliano, University of Milano.

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