Free-Trade Agreements in a Model of Trade, Migration and Politics

John Douglas Wilson () and Ilkay Yilmaz ()
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John Douglas Wilson: Department of Economics, Michigan State University, East Lansing, MI 48824, USA
Ilkay Yilmaz: Department of Economics, Mersin University, Ciftlikkoy, Yenisehir 33342, Mersin, Turkey

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2018, vol. 13, issue 1, 15-31

Abstract: This paper uses a probabilistic voting model to investigate voting for a free-trade agreement between a labor-abundant country and a capital-abundant country. Migration from the labor-abundant country to the capital-abundant country increases the probability of a free-trade agreement, with lower migration costs leading to more migration and a higher free-trade probability. On the other hand, if a lower probability of free trade is caused by an increased voter bias against free-trade candidates, then there is less migration. A dynamic extension of the model is also investigated.

Keywords: free trade; migration; Heckscher-Ohlin; labor-abundant; capital- abundant (search for similar items in EconPapers)
JEL-codes: F13 F22 (search for similar items in EconPapers)
Date: 2018
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