On the Political Economy of High Skilled Migration and International Trade

24 Pages Posted: 19 Jul 2012

See all articles by Spiros Bougheas

Spiros Bougheas

University of Nottingham - School of Economics

Douglas Nelson

Tulane University - Department of Economics

Date Written: July 18, 2012

Abstract

We develop a two-country, two-sector model with a continuum of workers to address the link between migration and trade where policy is determined by a simple referendum. In particular, we address two questions. First, are states already in free trade areas more likely to support full integration than states without free trade? Second, is trade liberalization more likely to be supported by a simultaneous referendum on trade and migration than in one on trade alone? The key to our analysis is the recognition that for free trade, migration, or trade and migration to be adopted, the relevant policy must pass the referendum in both countries. We identify conditions under which that occurs. Our model provides an interpretation of the evolution of the politics of economic integration related to NAFTA and European Union.

Keywords: skilled labor, migration, trade, political economy

JEL Classification: F150, F220, F590

Suggested Citation

Bougheas, Spiros and Nelson, Douglas R., On the Political Economy of High Skilled Migration and International Trade (July 18, 2012). CESifo Working Paper Series No. 3880. Available at SSRN: https://ssrn.com/abstract=2111935

Spiros Bougheas (Contact Author)

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Douglas R. Nelson

Tulane University - Department of Economics ( email )

New Orleans, LA 70118
United States

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