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Revisiting the Migration-Development Nexus: A Gravity Model Approach

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  • Letouzé, Emmanuel
  • Purser, Mark
  • Rodríguez, Francisco
  • Cummins, Matthew

Abstract

This paper presents empirical estimates of a gravity model of bilateral migration that properly accounts for non-linearities and tackles causality issues through an instrumental variables approach. In contrast to the existing literature, which is limited to OECD data, we have estimated our model using a matrix of bilateral migration stocks for 127 countries. We find that the inverted-U relationship between income at origin and migration found by other authors survives the more demanding bilateral specification but does not survive both instrumentation and introduction of controls for the geographical and cultural proximity between country pairs. We also evaluate the effect of migration on origin and destination country income using the geographically determined component of migration as a source of exogenous variation and fail to find a significant effect of migration on origin or destination income.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 19227.

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Date of creation: 01 Oct 2009
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Handle: RePEc:pra:mprapa:19227

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Keywords: Gravity models; international migration; economic growth;

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References

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  1. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
  2. Hatton, Timothy J. & Williamson, Jeffrey G., 2001. "Demographic and Economic Pressure on Emigration out of Africa," IZA Discussion Papers 250, Institute for the Study of Labor (IZA).
  3. Hatton, Timothy J. & Williamson, Jeffrey G., 2003. "What Fundamentals Drive World Migration?," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. Felbermayr, Gabriel J. & Hiller, Sanne & Sala, Davide, 2010. "Does immigration boost per capita income?," Economics Letters, Elsevier, vol. 107(2), pages 177-179, May.
  5. Allen J. Scott, 2009. "World Development Report 2009: reshaping economic geography," Journal of Economic Geography, Oxford University Press, vol. 9(4), pages 583-586, July.
  6. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-16, March.
  7. Anna Maria Mayda, 2007. "International migration: A panel data analysis of the determinants of bilateral flows," CReAM Discussion Paper Series 0707, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  8. Philip L. Martin, 1993. "Trade and Migration: NAFTA and Agriculture," Peterson Institute Press: All Books, Peterson Institute for International Economics, Peterson Institute for International Economics, number pa38, July.
  9. Carlos Carrillo & Carmen A. Li, 2002. "Trade Blocks and the Gravity Model: Evidence from Latin American Countries," Economics Discussion Papers, University of Essex, Department of Economics 542, University of Essex, Department of Economics.
  10. Dean Yang, 2008. "International Migration, Remittances and Household Investment: Evidence from Philippine Migrants' Exchange Rate Shocks," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 118(528), pages 591-630, 04.
  11. Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-81, August.
  12. Deardoff, A.V., 1995. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," Working Papers 382, Research Seminar in International Economics, University of Michigan.
  13. Hatton, Timothy J. & Williamson, Jeffrey G., 2004. "Refugees, Asylum Seekers and Policy in Europe," IZA Discussion Papers 1230, Institute for the Study of Labor (IZA).
  14. Hatton, T.J. & Williamson, J.G., 1992. "What Drove the Mass Migrations from Europe in the Late Ninteenth Century," Harvard Institute of Economic Research Working Papers 1614, Harvard - Institute of Economic Research.
  15. Alan V. Deardorff, 1995. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," NBER Working Papers 5377, National Bureau of Economic Research, Inc.
  16. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2002. "Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development," NBER Working Papers 9305, National Bureau of Economic Research, Inc.
  17. Lewer, Joshua J. & Van den Berg, Hendrik, 2008. "A gravity model of immigration," Economics Letters, Elsevier, vol. 99(1), pages 164-167, April.
  18. Hatton, Timothy J. & Williamson, Jeffrey G., 1998. "The Age of Mass Migration: Causes and Economic Impact," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780195116519, October.
  19. Egger, Peter, 2000. "A note on the proper econometric specification of the gravity equation," Economics Letters, Elsevier, vol. 66(1), pages 25-31, January.
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Cited by:
  1. Michael Good, 2013. "Gravity and Localized Migration," Economics Bulletin, AccessEcon, vol. 33(4), pages 2445-2453.
  2. Michael Clemens, 2014. "Does Development Reduce Migration? - Working Paper 359," Working Papers 359, Center for Global Development.
  3. Francesco Nicolli & Giulia Bettin, 2012. "Does climate change foster emigration from less developed countries? Evidence from bilateral data," Working Papers 201210, University of Ferrara, Department of Economics.
  4. Laura Hering, 2014. "Does Access to Foreign Markets shape Internal Migration? Evidence from Brazil," Tinbergen Institute Discussion Papers 14-084/VI, Tinbergen Institute.

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