International Migration and International Trade

46 Pages Posted: 1 Jun 2004 Last revised: 26 Jul 2010

Assaf Razin

Tel Aviv University - Eitan Berglas School of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Efraim Sadka

Tel Aviv University - Eitan Berglas School of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: December 1992

Abstract

This paper surveys key developments in the theory of international migration and international trade, and provides a few stylized facts. International migration, in many important cases, such as cross-country differences in productivity, can be a complement to international flows of commodities. In the presence of a productivity difference that is generated by an external economy effect of human, capital physical capital has weak incentives to flow from developed to underdeveloped countries while pressures for international migration from poor to rich countries are strong. The balancing factors underlying an efficient global dispersion of population are those which generate advantages to size, such as public goods, or increasing returns to scale on one hand, and those which generate disadvantages to size, such as immobile factors or congestion effects in the utilization of public services, on the other hand. The modem welfare state typically redistribute income from the rich to the poor in a way which attracts poor migrants from the less developed countries. Since migration could impose a toll on the redistribution policy of the Developed Country it may benefit from the extension of foreign aid to the Less Developed Country if this aid serves to finance a subsidy to workers in the Less Developed Country, thereby containing migration.

Suggested Citation

Razin, Assaf and Sadka, Efraim, International Migration and International Trade (December 1992). NBER Working Paper No. w4230. Available at SSRN: https://ssrn.com/abstract=334320

Assaf Razin (Contact Author)

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
+972 3 640 7303 (Phone)
+972 3 640 9908 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Efraim Sadka

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
+972 3 640 9712 (Phone)
+972 3 642 8074 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

IZA Institute of Labor Economics

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

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