Migration,trade and spillover effects |
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| Institution: | 1. Department of Economics, Federal University of Paraiba, Jardim Cidade Universitaria, Joao Pessoa - PB, 58.051-900 Brazil;2. University of Tennessee, Department of Economics, 527A, Stokely Management Center, Knoxville, Tennessee, 37996 USA;3. CEPII, 20 Avenue Segur, Paris F-75007, France;1. Fudan University School of Economics, China;2. Peking University Guanghua School of Management, China;1. Carnegie Mellon University, Qatar;2. University of Bologna, Strada Maggiore 45, Bologna 40125, Italy;1. Institute of Advanced Research, Key Laboratory of Mathematical Economics of Ministry of Education, Shanghai University of Finance and Economics, 111 Wuchuan Road, Shanghai, 200433, China;2. Institute for Economic and Social Research, Jinan University, No. 601, West Huangpu Avenue, Guangzhou 510632, China |
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| Abstract: | This paper identifies a new channel through which migrants can affect the import demand of goods in the host country. In migrating from origin to destination country, migrants observe a change in the price of the bundle of consumable goods. In particular, the migration decision can imply a reduction in the price of imported goods 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. Our empirical results strongly confirm this channel and suggest a new perspective about how migration can affect welfare and trade in destination countries. |
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