Migration, trade and spillover effects
- Resource Type
- Authors
- Luiz Renato Lima; Erik Alencar de Figueiredo; Gianluca Orefice
- Source
- Journal of Comparative Economics. 48:405-421
- Subject
- Consumption (economics)
Economics and Econometrics
media_common.quotation_subject
05 social sciences
Tariff
International economics
Emigration
Quantile regression
Host country
Spillover effect
0502 economics and business
Business
050207 economics
Welfare
050205 econometrics
media_common
- Language
- ISSN
- 0147-5967
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.