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International Trade and MIgration: A Quantitative Framework

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  • Sirries, Steffen
  • Larch, Mario

Abstract

Goods trade and international mobility of labor are typically analyzed separately. While there is excellent research in both fields, far less is known about the interrelationships between international migration and international trade. This paper provides a first structurally estimable model of international trade with endogenous international migration choices of workers which can be used for model-based counterfactual predictions. Using bilateral trade and migration data for 33 OECD countries we find that quantitative welfare predictions vastly change: investigating reasonable changes in the costs of factor and goods mobility across borders in this unified framework almost doubles the predicted welfare effects compared to established models. Our results sensitize policy makers who seek ex-ante evaluations of international trade agreements and migration policies.

Suggested Citation

  • Sirries, Steffen & Larch, Mario, 2014. "International Trade and MIgration: A Quantitative Framework," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100516, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc14:100516
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    References listed on IDEAS

    as
    1. Benedikt Heid & Mario Larch, 2012. "International Trade and Unemployment: A Quantitative Framework," CESifo Working Paper Series 4013, CESifo.
    2. Redding, Stephen J., 2016. "Goods trade, factor mobility and welfare," Journal of International Economics, Elsevier, vol. 101(C), pages 148-167.
    3. Caglar Ozden & Christopher R. Parsons & Maurice Schiff & Terrie L. Walmsley, 2011. "Where on Earth is Everybody? The Evolution of Global Bilateral Migration 1960-2000," The World Bank Economic Review, World Bank, vol. 25(1), pages 12-56, May.
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    7. James E. Anderson, 2011. "The Gravity Model," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 133-160, September.
    8. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
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    More about this item

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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