The welfare impact of migration with endogenous cross-border movement: An application to the European Union |
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| Affiliation: | 1. Aletheia University, Taiwan;2. National Taichung University of Science and Technology, Taiwan;1. China Economics and Management Academy, Central University of Finance and Economics, No. 39 South College Road, Haidian District, 100081 Beijing, China;2. School of Finance, Jiangxi University of Finance and Economics, Nanchang, China;3. School of Economics, Jiangxi University of Finance and Economics, Nanchang, 330013, China;1. IMUVa, Universidad de Valladolid, Spain;2. Universidad de Murcia, Spain;1. University of Milano, Bicocca and CefES, Italy;2. University of Pavia, Griffith University and CefES, Italy;1. Narodowy Bank Polski, Poland;2. University of Lodz, Poland |
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| Abstract: | In this paper, I examine the welfare impact of migration in a general equilibrium model with endogenous worker location choice. My framework incorporates labor productivity differences across countries, worker heterogeneity in productivity across skill and nativity types, as well as country-pair specific costs of migration. In a series of experiments, I predict the migration response of workers to an expansion or contraction in the number of European Union (EU) member countries. For the case of the United Kingdom (U.K.) leaving the EU, commonly referred to as Brexit, low skilled native-born U.K. workers suffer a drop-in income, whereas high skilled workers experience an increase. This result is driven, in part, by an increase in high skilled immigration to the U.K. from outside the EU, which helps to dampen the loss in income of low skilled workers. |
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| Keywords: | International migration European union Migration policies Brexit F22 O15 O52 |
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