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Migration, trade and spillover effects

Author

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  • Figueiredo, Erik
  • Lima, Luiz Renato
  • Orefice, Gianluca

Abstract

This paper identifies a new channel through which migrants can affect the import demand of goods in the host country. In migrating from origin to destination country, migrants observe a change in the price of the bundle of consumable goods. In particular, the migration decision can imply a reduction in the price of imported goods for the consumption bundle of migrants: emigration towards less (tariff) protected countries allows the consumption of products that were prohibitively protected in the origin countries of migrants. To test this channel we estimate the import demand effect of migrant groups coming from third high (tariff) protected countries. Our empirical results strongly confirm this channel and suggest a new perspective about how migration can affect welfare and trade in destination countries.

Suggested Citation

  • Figueiredo, Erik & Lima, Luiz Renato & Orefice, Gianluca, 2020. "Migration, trade and spillover effects," Journal of Comparative Economics, Elsevier, vol. 48(2), pages 405-421.
    • Handle: RePEc:eee:jcecon:v:48:y:2020:i:2:p:405-421
    DOI: 10.1016/j.jce.2019.10.005
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    1. Anthony Edo & Lionel Ragot & Hillel Rapoport & Sulin Sardoschau & Andreas Steinmayr & Arthur Sweetman, 2020. "An introduction to the economics of immigration in OECD countries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(4), pages 1365-1403, November.

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    More about this item

    Keywords

    Trade-migration; Third-country effect; Quantile regression; Imputation;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation

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