Migration and Trade: Theory with an Application to the Eastern-Western European Integration

Giovanni Peri and Susana Iranzo
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Susana Iranzo: Department of Economics, University of California Davis

No 81, Working Papers from University of California, Davis, Department of Economics

Abstract: The remarkable increase in trade flows and in migratory flows of highly educated people are two important features of globalization of the last decades. This paper extends a two-country model of inter- and intra-industry trade to a rich environment featuring technological differences, skill differences and the possibility of international labor mobility. The model is used to explain the patterns of trade and migration as countries remove barriers to trade and to labor mobility. We parameterize the model to match the features of the Western and Eastern European members of the EU and analyze first the effects of the trade liberalization which occured between 1989 and 2004, and then the gains and losses from migration which are expected to occur if legal barriers to labor mobility are substantially reduced. The lower barriers to migration would result in significant migration of skilled workers from Eastern European countries. Interestingly, this would not only benefit the migrants and most Western European workers but, via trade, it would also benefit the workers remaining in Eastern Europe.

Keywords: Skilled Migration; Gains from Variety; Real Wages; Eastern-Western Europe. (search for similar items in EconPapers)
JEL-codes: F12 F22 J61 (search for similar items in EconPapers)
Pages: 45
Date: 2009-03-30
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Citations: View citations in EconPapers (82)

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Related works:
Journal Article: Migration and trade: Theory with an application to the Eastern-Western European integration (2009)
Working Paper: Migration and Trade: Theory with an Application to the Eastern-Western European Integration (2009)
Working Paper: Migration and trade: Theory with an Application to the Eastern- Western European Integration (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:cda:wpaper:81

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