Third Country Effect of Migration: the Trade-Migration Nexus Revisited

Erik Figueiredo, Luiz Lima () and Gianluca Orefice

Working Papers from CEPII research center

Abstract: This paper proposes a new channel through which migrants can affect the import demand of the host country. In migrating from origin to destination country, migrants observe a change in the prices of the bundle of consumable goods. In particular, the migration decision can reflect a reduction in the price of imported goods (due to lower applied tariff) 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. We use a theory-grounded gravity estimations and a fresh econometric techniques able to address both the zero migration flows problem and the endogeneity of migrants. Our results suggest that such a third-country immigrant effect is significant and positive.

Keywords: Trade-Migration; Third-Country Effect; Quantile Regression; Imputation (search for similar items in EconPapers)
JEL-codes: C21 C36 F14 (search for similar items in EconPapers)
Date: 2016-09
New Economics Papers: this item is included in nep-int and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepidt:2016-22

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