Migration deflection: The role of Preferential Trade Agreements

We derive and estimate a migration gravity equation featuring bilateral and third country migration and offshoring costs to investigate whether there is migration deflection across origin countries. Such deflection occurs if migration from an origin country to a destination country is negatively affected by reductions in the costs of migrating from third origin countries to the destination country. Using information on migration- and offshoring-related provisions contained in Preferential Trade Agreements to proxy for migration and offshoring costs, we find robust empirical evidence in favor of migration deflection across economically similar origin countries with some degree of cultural affinity, as measured by sharing a common language. We discuss the policy relevance of this result both from the perspective of destination countries and from the perspective of origin countries.