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

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  • Laura Hering

    (Erasmus University Rotterdam, the Netherlands)

  • Rodrigo Paillacar

    (University of Cergy-Pontoise, France)

Abstract

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.

Suggested Citation

  • Laura Hering & Rodrigo Paillacar, 2014. "Does Access to Foreign Markets shape Internal Migration? Evidence from Brazil," Tinbergen Institute Discussion Papers 14-084/VI, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20140084
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    More about this item

    Keywords

    Regional migration; international trade; market access; Brazil;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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