Egger, Peter H.; v. Ehrlich, Maximilian; Nelson, Douglas R. (January 2020). The trade effects of skilled versus unskilled migration (CRED Research Paper 31). Bern: CRED - Center for Regional Economic Development
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CRED_Research_Paper_Nr._31.pdf - Published Version Available under License Creative Commons: Attribution (CC-BY). Download (2MB) | Preview |
In this paper, we assess the role of skilled versus unskilled migration for bilateral trade in a
flexible econometric model. Using a large data-set on bilateral skill-specific migration and a
flexible novel identification strategy, the functionally flexible impact of different levels of
skilled and unskilled immigration on the volume and structure of bilateral imports is identified in a quasi-experimental design. We find evidence of a polarized impact of skillspecific immigration on imports: highly concentrated skilled or unskilled immigrants induce higher import volumes than a balanced composition of the immigrant base. This effect turns out particularly important when institutions are weak. Regarding the structure of imports, we observe that skilled immigrants specifically add to imports in differentiated goods. Both bits of evidence are consistent with a segregation of skill-specific immigrant networks and corresponding trade patterns.
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