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A Global View of Cross-Border Migration

  • Julian di Giovanni

    ()

    (International Monetary Fund and University of Toronto)

  • Andrei Levchenko

    ()

    (University of Michigan and NBER)

  • Francesc Ortega

    ()

    (Queens College - CUNY)

This paper evaluates the welfare impact of observed levels of migration and remittances in both origins and destinations, using a quantitative multi- sector model of the global economy calibrated to aggregate and firm-level data on 60 developed and developing countries. Our framework accounts jointly for origin and destination characteristics, as well as the inherently multi-country nature of both migration and other forms of integration, such as international trade and remittance flows. In the presence of firm heterogeneity and imperfect competition larger countries enjoy a greater number of varieties and thus higher welfare, all else equal. Because of this effect, natives in countries that received a lot of migration – such as Canada or Australia – are better off. The remaining natives in countries with large emigration flows – such as Jamaica or El Salvador – are also better off due to migration, but for a different reason: remittances. The quantitative results show that the welfare impact of observed levels of migration is substantial, at about 5 to 10% for the main receiving countries and about 10% for the main sending countries.

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Paper provided by Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London in its series CReAM Discussion Paper Series with number 1218.

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Date of creation: May 2012
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Handle: RePEc:crm:wpaper:1218
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