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The trade effects of skilled versus unskilled migration

Author

Listed:
  • Egger, Peter H.
  • Ehrlich, Maximilian v.
  • Nelson, Douglas R.
Abstract
In this paper, we assess the role of skilled versus unskilled migration for bilateral trade in a flexible econometric model. Using a large data-set on bilateral skill-specific migration and a flexible novel identification strategy, the functionally flexible impact of different levels of skilled and unskilled immigration on the volume and structure of bilateral imports is identified in a quasi-experimental design. We find evidence of a polarized impact of skill-specific immigration on imports: highly concentrated skilled or unskilled immigrants induce higher import volumes than a balanced composition of the immigrant base. This effect turns out particularly important when institutions are weak. Regarding the structure of imports, we observe that skilled immigrants specifically add to imports in differentiated goods. Both bits of evidence are consistent with a segregation of skill-specific immigrant networks and corresponding trade patterns.

Suggested Citation

  • Egger, Peter H. & Ehrlich, Maximilian v. & Nelson, Douglas R., 2020. "The trade effects of skilled versus unskilled migration," Journal of Comparative Economics, Elsevier, vol. 48(2), pages 448-464.
    • Handle: RePEc:eee:jcecon:v:48:y:2020:i:2:p:448-464
    DOI: 10.1016/j.jce.2019.12.008
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    Cited by:

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    3. Bastos, Paulo & Silva, Joana, 2012. "Networks, firms, and trade," Journal of International Economics, Elsevier, vol. 87(2), pages 352-364.
    4. Egger, Peter H. & Ehrlich, Maximilian v. & Nelson, Douglas R., 2020. "The trade effects of skilled versus unskilled migration," Journal of Comparative Economics, Elsevier, vol. 48(2), pages 448-464.
    5. Egger, Peter H. & Erhardt, Katharina & Lassmann, Andrea, 2019. "Immigration and firms’ integration in international production networks," European Economic Review, Elsevier, vol. 111(C), pages 1-34.
    6. Nenci, Silvia & Vurchio, Davide, 2023. "Modeling country-sectoral spillovers in generalized propensity score matching: An empirical test on trade data," Economic Modelling, Elsevier, vol. 124(C).
    7. Wei, Hao & Zhou, Yaru, 2023. "The impact of international talent on environmental pollution: Firm-level evidence from China," Energy Economics, Elsevier, vol. 125(C).
    8. Max Nathan, 2014. "The wider economic impacts of high-skilled migrants: a survey of the literature for receiving countries," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    9. Nathan, Max, 2013. "The Wider Economic Impacts of High-Skilled Migrants: A Survey of the Literature," IZA Discussion Papers 7653, Institute of Labor Economics (IZA).
    10. Khraiche, Maroula, 2014. "Trade, capital adjustment and the migration of talent," International Review of Economics & Finance, Elsevier, vol. 34(C), pages 24-40.

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    More about this item

    Keywords

    Skilled vs. unskilled immigration; Migrant networks; Bilateral trade; Quasi-randomized experiments; Generalized propensity score estimation;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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