The Effect of Income and Immigration Policies on International Migration

36 Pages Posted: 18 Aug 2012

See all articles by Francesc Ortega

Francesc Ortega

City University of New York, CUNY Queens College - Department of Economics ; IZA Institute of Labor Economics

Giovanni Peri

University of California, Davis - Department of Economics

Date Written: August 2012

Abstract

This paper makes two contributions to the literature on the determinants of international migration flows. First, we compile a new dataset on annual bilateral migration flows covering 15 OECD destination countries and 120 sending countries for the period 1980-2006. We also collect data on time-varying immigration policies that regulate the entry of immigrants in our destination countries over this period. Second, we extend the empirical model of migration choice across multiple destinations developed by Grogger and Hanson (2011) by allowing for unobserved individual heterogeneity between migrants and non-migrants. Our estimates show that international migration flows are highly responsive to income per capita at destination. This elasticity is twice as high for within-EU migration, reflecting the higher degree of labor mobility within the European Union. We also find that tightening of laws regulating immigrant entry reduce rapidly and significantly their flow.

Suggested Citation

Ortega, Francesc and Peri, Giovanni, The Effect of Income and Immigration Policies on International Migration (August 2012). NBER Working Paper No. w18322. Available at SSRN: https://ssrn.com/abstract=2131692

Francesc Ortega (Contact Author)

City University of New York, CUNY Queens College - Department of Economics ( email )

65-30 Kissena Blvd
Flushing, NY 11367-1597
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Giovanni Peri

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-3033 (Phone)
530-752-9382 (Fax)

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