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

Susana Iranzo (susana.iranzo@urv.cat) and Giovanni Peri

No 905, RF Berlin - CReAM Discussion Paper Series from Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM)

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 calibrate 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 occurred between 1989 and 2004, and then the gains and losses from migration which would occur if barriers to labor mobility are reduced. The lower barriers to migration 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)
Date: 2009-01
New Economics Papers: this item is included in nep-dev, nep-eec, nep-int, nep-lab, nep-mig and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (105)

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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:crm:wpaper:0905

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