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A Global View of Cross-Border Migration

  • Julian di Giovanni

    (International Monetary Fund and University of Toronto)

  • Andrei A. 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 Research Seminar in International Economics, University of Michigan in its series Working Papers with number 627.

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Length: 47 pages
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Handle: RePEc:mie:wpaper:627
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Web page: http://fordschool.umich.edu/rsie/

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