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The Trade Effects of Skilled versus Unskilled Migration

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  • Nelson, Doug R
  • Egger, Peter
  • Ehrlich, Maximilian Von

Abstract

In this paper, we assess the role of skilled versus unskilled migration for bilateral trade using a flexible reduced-form model where the stocks of skilled and unskilled migrants at the country-pair level are determined as endogenous continuous treatments. The impact of different levels of skilled and unskilled migration on the volume and structure of bilateral trade is identified in a quasi-experimental design. This is accomplished through a generalization of propensity score estimation procedures for a case of multivariate, multi-valued treatments whereof the bivariate continuous treatment model is a special case. We find evidence of a polarized impact of skill-specific migration on trade: highly concentrated skilled or unskilled migrants induce higher trade volumes than a balanced composition of the immigrant base. Regarding the structure of trade, we observe a polarization specifically for differentiated goods and for north-south trade. Both bits of evidence are consistent with a segregation of skill-specific immigrant networks and corresponding consumption patterns and effects on trade.

Suggested Citation

  • Nelson, Doug R & Egger, Peter & Ehrlich, Maximilian Von, 2012. "The Trade Effects of Skilled versus Unskilled Migration," CEPR Discussion Papers 9053, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:9053
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    Cited by:

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    3. Wei, Hao & Zhou, Yaru, 2023. "The impact of international talent on environmental pollution: Firm-level evidence from China," Energy Economics, Elsevier, vol. 125(C).
    4. Egger, Peter H. & Ehrlich, Maximilian v. & Nelson, Douglas R., 2020. "The trade effects of skilled versus unskilled migration," Journal of Comparative Economics, Elsevier, vol. 48(2), pages 448-464.
    5. Max Nathan, 2014. "The wider economic impacts of high-skilled migrants: a survey of the literature for receiving countries," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    6. Bastos, Paulo & Silva, Joana, 2012. "Networks, firms, and trade," Journal of International Economics, Elsevier, vol. 87(2), pages 352-364.
    7. Alfano, Vincenzo & Gaeta, Giuseppe Lucio & Petraglia, Carmelo & Vecchione, Gaetano, 2022. "Back to the future: the long-term effects of skilled migration on tech-intensive trade," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 25-34.
    8. Nenci, Silvia & Vurchio, Davide, 2023. "Modeling country-sectoral spillovers in generalized propensity score matching: An empirical test on trade data," Economic Modelling, Elsevier, vol. 124(C).
    9. Nathan, Max, 2013. "The Wider Economic Impacts of High-Skilled Migrants: A Survey of the Literature," IZA Discussion Papers 7653, Institute of Labor Economics (IZA).
    10. Khraiche, Maroula, 2014. "Trade, capital adjustment and the migration of talent," International Review of Economics & Finance, Elsevier, vol. 34(C), pages 24-40.

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    Keywords

    Bilateral trade; Generalized propensity score estimation; Quasi-randomized experiments; Skilled vs. unskilled immigration;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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