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Revisiting the Trade-Migration Nexus: Evidence from New OECD data

Author

Listed:
  • Gabriel Felbermayr

    (Universität Hohenheim = University of Hohenheim)

  • Farid Toubal

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, ENS Cachan - École normale supérieure - Cachan)

Abstract

International migrants contribute to bilateral trade creation if their presence reduces information costs or entails additional demand for goods from their source countries. Using new data on stocks of foreign-born individuals by skill class, we try to separately quantify those two channels. We assume that improved information affects host countries' imports and exports symmetrically, while the preference channel matters for imports only. On average, for differentiated goods, both channels contribute evenly toward the total trade-creating effect of migration. In line with expectations, the relative importance of the trade cost channel is largest for homogeneous goods and for high-skilled migrants.

Suggested Citation

  • Gabriel Felbermayr & Farid Toubal, 2012. "Revisiting the Trade-Migration Nexus: Evidence from New OECD data," Post-Print hal-00783759, HAL.
    • Handle: RePEc:hal:journl:hal-00783759
    DOI: 10.1016/j.worlddev.2011.11.016
    as

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