The effect of commercial policy on international migration flows: The case of the United States and Mexico

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Abstract

Microeconomic simulations are performed to determine the impact of liberalized commodity trade on Mexican immigrant supply to the United States. The results suggest that a removal of trade barriers will reduce migration flows, but that the reduction will be fairly modest. Specifically, if both countries move from the levels of protection characteristic of the mid-1960s to completely free trade, the ratio of real U.S.-Mexican wages falls by roughly 18 percent. Using an upper bound for the range of empirical estimates of the wage elasticity of immigrant supply, this implies a maximum reduction in migration flows of 35 percent. A unilateral elimination of trade barriers by the United States reduces Mexican immigrant supply by a maximum of 14 per cent.

Original languageEnglish (US)
Pages (from-to)41-53
Number of pages13
JournalJournal of International Economics
Volume17
Issue number1-2
DOIs
StatePublished - Aug 1984

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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