Journal Article

Does Access to Foreign Markets Shape Internal Migration? Evidence from Brazil

Laura Hering and Rodrigo Paillacar

in The World Bank Economic Review

Volume 30, issue 1, pages 78-103
Published in print January 2016 | ISSN: 0258-6770
Published online April 2015 | e-ISSN: 1564-698X | DOI: https://dx.doi.org/10.1093/wber/lhv028
Does Access to Foreign Markets Shape Internal Migration? Evidence from Brazil

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  • International Trade
  • Labour and Demographic Economics
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  • Household Analysis

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This paper investigates how internal migration is affected by Brazil's increased integration into the world economy. We analyze the impact of regional differences in access to foreign demand on sector-specific bilateral migration rates between the Brazilian states for the years 1995 to 2003. Using international trade data, we compute a foreign market access measure at the sectoral level, which is exogenous to domestic migration. A higher foreign market access is associated with a higher local labor demand and attracts workers via two potential channels: higher wages and new job opportunities. Our results show that both channels play a significant role in internal migration. Further, we find a heterogeneous impact across industries, according to their comparative advantage on the world market. However, the observed impact is driven by the strong reaction of low-educated workers to changes in market access. This finding is consistent with the fact that Brazil is exporting mainly goods that are intensive in unskilled labor.

Keywords: F16; F66; R12; R23

Journal Article.  10304 words.  Illustrated.

Subjects: International Trade ; Labour and Demographic Economics ; Urban, Rural, and Regional Economics ; Household Analysis

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