Resum:
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The remarkable increase in trade flows and in migratory flows of highly educated people are two important
features of globalization of the last decades. This paper extends a two-country model of inter- and intraindustry
trade to a rich environment featuring technological differences, skill differences and the possibility
of international labor mobility. The model is used to explain the patterns of trade and migration as countries
remove barriers to trade and to labor mobility. We parameterize the model to match the features of the
Western and Eastern European members of the EU and analyze first the effects of the trade liberalization
which occured between 1989 and 2004, and then the gains and losses from migration which are expected to
occur if legal barriers to labor mobility are substantially reduced. The lower barriers to migration would
result in significant migration of skilled workers from Eastern European countries. Interestingly, this would
not only benefit the migrants and most Western European workers but, via trade, it would also benefit the
workers remaining in Eastern Europe.
Key Words: Skilled Migration, Gains from Variety, Real Wages, Eastern-Western Europe.
JEL Codes: F12, F22, J61. |