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Revisiting the Migration-Development Nexus: A Gravity Model Approach

  • Emmanuel Letouzé

    (Human Development Report Office (HDRO), United Nations Development Programme)

  • Mark Purser

    (Human Development Report Office (HDRO), United Nations Development Programme)

  • Francisco Rodríguez

    ()

    (Human Development Report Office (HDRO), United Nations Development Programme)

  • Matthew Cummins

    (Human Development Report Office (HDRO), United Nations Development Programme)

This paper presents empirical estimates of a gravity model of bilateral migration that properly accounts for non-linearities and tackles causality issues through an instrumental variables approach. In contrast to the existing literature, which is limited to OECD data, we have estimated our model using a matrix of bilateral migration stocks for 127 countries. We find that the inverted-U relationship between income at origin and migration found by other authors survives the more demanding bilateral specification but does not survive both instrumentation and introduction of controls for the geographical and cultural proximity between country pairs. We also evaluate the effect of migration on origin and destination country income using the geographically determined component of migration as a source of exogenous variation and fail to find a significant effect of migration on origin or destination income.

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File URL: http://hdr.undp.org/en/reports/global/hdr2009/papers/HDRP_2009_44.pdf
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Paper provided by Human Development Report Office (HDRO), United Nations Development Programme (UNDP) in its series Human Development Research Papers (2009 to present) with number HDRP-2009-44.

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Length: 46 pages
Date of creation: Oct 2009
Date of revision: Oct 2009
Publication status: Published as background research for the 2009 Human Development Report.
Handle: RePEc:hdr:papers:hdrp-2009-44
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  1. Felbermayr, Gabriel & Hiller, Sanne & Sala, Davide, 2010. "Does immigration boost per capita income?," Munich Reprints in Economics 20582, University of Munich, Department of Economics.
  2. Rodrik, Dani & Subramanian, Arvind & Trebbi, Francesco, 2002. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," CEPR Discussion Papers 3643, C.E.P.R. Discussion Papers.
  3. Mayda, Anna Maria, 2007. "International Migration: A Panel Data Analysis of the Determinants of Bilateral Flows," CEPR Discussion Papers 6289, C.E.P.R. Discussion Papers.
  4. Dean Yang, 2006. "International Migration, Remittances, and Household Investment: Evidence from Philippine Migrants' Exchange Rate Shocks," NBER Working Papers 12325, National Bureau of Economic Research, Inc.
  5. Hatton, Timothy J. & Williamson, Jeffrey G., 1998. "The Age of Mass Migration: Causes and Economic Impact," OUP Catalogue, Oxford University Press, number 9780195116519, December.
  6. Hatton, Timothy J. & Williamson, Jeffrey G., 2003. "What Fundamentals Drive World Migration?," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  7. Deardoff, A.V., 1995. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," Working Papers 382, Research Seminar in International Economics, University of Michigan.
  8. Timothy J. Hatton & Jeffrey G. Williamson, 1992. "What Drove the Mass Migrations from Europe in the Late Nineteenth Century?," NBER Historical Working Papers 0043, National Bureau of Economic Research, Inc.
  9. Hatton, Timothy J. & Williamson, Jeffrey G, 2005. "Refugees, Asylum Seekers and Policy in Europe," CEPR Discussion Papers 5058, C.E.P.R. Discussion Papers.
  10. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-16, March.
  11. Carrillo-Tudela, Carlos & Li, Carmen A, 2002. "Trade Blocks and the Gravity Model: Evidence from Latin American Countries," Economics Discussion Papers 2731, University of Essex, Department of Economics.
  12. Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-81, August.
  13. Timothy J. Hatton & Jeffrey G. Williamson, 2001. "Demographic and Economic Pressure on Emigration Out of Africa," NBER Working Papers 8124, National Bureau of Economic Research, Inc.
  14. Allen J. Scott, 2009. "World Development Report 2009: reshaping economic geography," Journal of Economic Geography, Oxford University Press, vol. 9(4), pages 583-586, July.
  15. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
  16. Deardorff, A.V., 1995. "Determinants of Bilateral Trade : Does Gravity Work in a Neoclassical World?," Papers 95-05, Michigan - Center for Research on Economic & Social Theory.
  17. Philip L. Martin, 1993. "Trade and Migration: NAFTA and Agriculture," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa38.
  18. repec:esx:essedp:542 is not listed on IDEAS
  19. Egger, Peter, 2000. "A note on the proper econometric specification of the gravity equation," Economics Letters, Elsevier, vol. 66(1), pages 25-31, January.
  20. Lewer, Joshua J. & Van den Berg, Hendrik, 2008. "A gravity model of immigration," Economics Letters, Elsevier, vol. 99(1), pages 164-167, April.
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