This paper evaluates the global welfare impact of observed levels of migration using a quantitative
multi-sector model of the world economy calibrated to aggregate and firm-level data.
Our framework features cross-country labor productivity differences, international trade, remittances,
and a heterogeneous workforce. We compare welfare under the observed levels of
migration to a no-migration counterfactual. In the long run, natives in countries that received
a lot of migration -such as Canada or ...
This paper evaluates the global welfare impact of observed levels of migration using a quantitative
multi-sector model of the world economy calibrated to aggregate and firm-level data.
Our framework features cross-country labor productivity differences, international trade, remittances,
and a heterogeneous workforce. We compare welfare under the observed levels of
migration to a no-migration counterfactual. In the long run, natives in countries that received
a lot of migration -such as Canada or Australia- are better o due to greater product variety
available in consumption and as intermediate inputs. In the short run the impact of migration
on average welfare in these countries is close to zero, while the skilled and unskilled natives
tend to experience welfare changes of opposite signs. The remaining natives in countries with
large emigration flows -such as Jamaica or El Salvador- are also better off due to migration,
but for a different reason: remittances. The welfare impact of observed levels of migration is
substantial, at about 5 to 10% for the main receiving countries and about 10% in countries with
large incoming remittances. Our results are robust to accounting for imperfect transferability
of skills, selection into migration, and imperfect substitution between natives and immigrants.
+
