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Does Access to Foreign Markets shape Internal Migration? Evidence from Brazil

Listed author(s):
  • Laura Hering

    (Erasmus University Rotterdam, the Netherlands)

  • Rodrigo Paillacar

    (University of Cergy-Pontoise, France)

This paper investigates how internal migration is a affected by Brazil's increased integration into the world economy. We analyze the impact of regional differences in access to foreign demand on sector-specific bilateral migration rates between the Brazilian states for the years 1995 to 2003. Using international trade data, we compute a foreign market access indicator at the sectoral level, which is exogenous to domestic migration. A higher foreign market access is associated with a higher local labor demand and attracts workers via two potential channels: higher wages and new job opportunities. Our results show that both channels play a significant role in internal migration. Further, we find a heterogeneous impact across industries according to their comparative advantage on the world market. However, the impact of market access is robust only for low-educated wor kers. This finding is consistent with the fact that Brazil is exporting mainly goods that are intensive in unskilled labor.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 14-084/VI.

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Date of creation: 07 Jul 2014
Handle: RePEc:tin:wpaper:20140084
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