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Free-Trade Agreements in a Model of Trade, Migration and Politics

Author

Listed:
  • John Douglas Wilson

    (Department of Economics, Michigan State University, East Lansing, MI 48824, USA)

  • Ilkay Yilmaz

    (Department of Economics, Mersin University, Ciftlikkoy, Yenisehir 33342, Mersin, Turkey)

Abstract

This paper uses a probabilistic voting model to investigate voting for a free-trade agreement between a labor-abundant country and a capital-abundant country. Migration from the labor-abundant country to the capital-abundant country increases the probability of a free-trade agreement, with lower migration costs leading to more migration and a higher free-trade probability. On the other hand, if a lower probability of free trade is caused by an increased voter bias against free-trade candidates, then there is less migration. A dynamic extension of the model is also investigated.

Suggested Citation

  • John Douglas Wilson & Ilkay Yilmaz, 2018. "Free-Trade Agreements in a Model of Trade, Migration and Politics," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 13(1), pages 15-31, March.
    • Handle: RePEc:fec:journl:v:13:y:2018:i:1:p:15-31
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    File URL: http://journal.hep.com.cn/fec/EN/10.3868/s060-007-018-0003-7
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    More about this item

    Keywords

    free trade; migration; Heckscher-Ohlin; labor-abundant; capital- abundant;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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