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South-North migration and trade : a survey

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  • Schiff, Maurice

Abstract

Before 1973, the labor market in Europe was tight and immigration from the South (chiefly North Africa and Southern Europe) was encouraged. But with the slowdown in growth in the mid-1970s, the rise in unemployment, and increased economic uncertainty, immigration came to be viewed as a burden by the destination countries. The demand for migration fell, but the supply did not. As United States (U.S.) and European Union (EU) opposition to immigration increased, some proposed using trade policy to deal with immigration, with the assumption that trade is a substitute for migration. Using both one-sector and two-sector models, the author examines the relationship between trade and migration, as well as the welfare implications of different trade and migration policies for both sending and receiving countries. The results are ambiguous: opening markets in the North and providing foreign investment and foreign aid to the sending countries is more likely to slow down migration from Eastern Europe to the EU than from Africa to the EU or from Latin America to the U.S. It may also worsen the skill composition of migration from Africa to the EU and from Latin America to the U.S. Two results hold, nevertheless: the South gains from trade liberalization in either the North or the South, and the North gains from imposing an immigration tax. The policy implications are clear: the South should liberalize trade, while the North should impose an (optimal) immigration tax.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1696.

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Date of creation: 31 Dec 1996
Date of revision:
Handle: RePEc:wbk:wbrwps:1696

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Keywords: Economic Theory&Research; Banks&Banking Reform; Environmental Economics&Policies; Public Health Promotion; Municipal Financial Management; Economic Theory&Research; Banks&Banking Reform; Environmental Economics&Policies; Health Monitoring&Evaluation; Municipal Financial Management;

References

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  1. Kevin H. O'Rourke & Jeffrey G. Williamson, 1995. "Around the European Periphery 1870-1913: Globalization, Schooling and Growth," NBER Working Papers 5392, National Bureau of Economic Research, Inc.
  2. Rivera-Batiz, Francisco L., 1982. "International migration, non-traded goods and economic welfare in the source country," Journal of Development Economics, Elsevier, vol. 11(1), pages 81-90, August.
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Citations

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Cited by:
  1. Zhu, Nong & Luo, Xubei, 2008. "The impact of remittances on rural poverty and inequality in China," Policy Research Working Paper Series 4637, The World Bank.
  2. Sule Akkoyunlu & Boriss Siliverstovs, 2006. "Modelling Turkish Migration to Germany," Discussion Papers of DIW Berlin 595, DIW Berlin, German Institute for Economic Research.
  3. Riccardo Faini, 2002. "Développement, commerce international et migrations," Revue d’économie du développement, De Boeck Université, vol. 16(1), pages 85-116.
  4. Stephen Drinkwater & Paul Levine & Emanuela Lotti & Joseph Pearlman, 2003. "The Economic Impact of Migration: A Survey," School of Economics Discussion Papers 0103, School of Economics, University of Surrey.
  5. Hoekman, Bernard & Messerlin, Patrick, 2002. "Initial conditions and incentives for Arab economic integration : can the European Community's success be emulated?," Policy Research Working Paper Series 2921, The World Bank.
  6. Abdeslam Marfouk, 2008. "The African brain drain: scope and determinants," DULBEA Working Papers 08-07.RS, ULB -- Universite Libre de Bruxelles.

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