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The impact of international trade on emigration in developing countries

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  • Dambar Uprety

Abstract

This paper studies how international trade affects emigration in developing countries. This is a new aspect as previous studies investigated the impact of immigration on trade from host countries perspective. However, there are also reasons to believe that trade may affect the propensity to emigrate in the home countries, leading to potential brain drain in developing countries, especially given the theoretical hypothesis in Stolper–Samuelson (S–S) theorem within Heckscher–Ohlin (H–O) factor-proportion model that more educated workers are more likely to emigrate due to an increase in international trade. When low-skill abundant developing countries liberalize trade, the reward of the scarce factor (skilled labor) is reduced in these countries, but it increases in the high-skill abundant developed countries. Therefore, skilled workers in the developing countries see a strong incentive to migrate to developed countries. To test this hypothesis, this paper utilizes a panel of 133 developing countries for the period of 1980–2010 and finds that high-skilled workers are more likely to emigrate with trade while there appears to be no effect of trade on low-skilled workers.

Suggested Citation

  • Dambar Uprety, 2017. "The impact of international trade on emigration in developing countries," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 26(8), pages 907-923, November.
  • Handle: RePEc:taf:jitecd:v:26:y:2017:i:8:p:907-923
    DOI: 10.1080/09638199.2017.1329847
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    1. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    2. Faini, Riccardo, 2003. "Is the Brain Drain an Unmitigated Blessing?," WIDER Working Paper Series 064, World Institute for Development Economic Research (UNU-WIDER).
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