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Discussion Paper Details

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Title: A Global View of Cross-Border Migration

Author(s): Julian di Giovanni, Andrei A. Levchenko and Francesc Ortega

Publication Date: March 2014

Keyword(s): International Trade, Migration, Remittances and Welfare

Programme Area(s): Development Economics, International Macroeconomics, International Trade and Regional Economics and Labour Economics

Abstract: This paper evaluates the global welfare impact of observed levels of migration using a quantitative multi-sector model of the world economy calibrated to aggregate and firm-level data. Our framework features cross-country labor productivity difference, international trade, remittances, and a heterogeneous workforce. We compare welfare under the observed levels of migration to a no-migration counterfactual. In the long run, natives in countries that received a lot of migration -- such as Canada or Australia -- are better off due to greater product variety available in consumption and as intermediate inputs. In the short run the impact of migration on average welfare in these countries is close to zero, while the skilled and unskilled natives tend to experience welfare changes of opposite signs. The remaining natives in countries with large emigration flows -- such as Jamaica or El Salvador -- are also better off due to migration, but for a different reason: remittances. The welfare impact of observed levels of migration is substantial, at about 5 to 10% for the main receiving countries and about 10% in countries with large incoming remittances. Our results are robust to accounting for imperfect transferability of skills, selection into migration, and imperfect substitution between natives and immigrants.

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Bibliographic Reference

di Giovanni, J, Levchenko, A and Ortega, F. 2014. 'A Global View of Cross-Border Migration'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=9919