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Trade and Migration: A Quantitative Assessment

Author

Listed:
  • Luca David Opromolla

    (Banco de Portugal)

  • Fernando Parro

    (Johns Hopkins University)

  • Alessandro Sforza

    (LSE)

  • Lorenzo Caliendo

    (Yale University)

Abstract

We present a dynamic model of international migration and trade and use the model to quantify the trade, migration, and welfare effects of actual changes in migration and trade policy. Using the EU labor force survey for 23 countries we measure the flow of workers by nationality across countries before and after the EU 2004 enlargement. We exploit the timing variation of the migration policy to measure the change in migration costs. We then use our model to quantify the gains from the actual reductions in tariff and migration restrictions. We find that the gains from trade and migration are quite different. While all countries gain from trade, new member states (NMS) gain from international migration while not all EU countries gain. We show how the results depend crucially on the extent to which the migrants congest the use of local public services and factors. Our results shades new light to the study of the policy implications of migration and trade policy reforms.

Suggested Citation

  • Luca David Opromolla & Fernando Parro & Alessandro Sforza & Lorenzo Caliendo, 2017. "Trade and Migration: A Quantitative Assessment," 2017 Meeting Papers 1638, Society for Economic Dynamics.
    • Handle: RePEc:red:sed017:1638
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