DP1660 | Globalisation and Migratory Pressures from Developing Countries: A Simulation Analysis

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We use a Ricardo-Viner model to study the determinants of the supply of outmigration in developing countries in a model with heterogenous households. We assume that heterogeneity and migration costs prevent households from total migration. Data are calibrated to two archetypal developing economies (low-income and middle-income) to study how the supply of outmigration is affected by direct measures aimed at controlling migration (aid and increased migration costs) and indirect measures (commercial policy reform in the sending and receiving countries). We consider situations in which some households have a financial constraint on migration as well as situations of temporary and permanent migration. These simulations show that identical measures result in quite different patterns of migrations in each archetype and are sensitive to assumptions about the type of migration (permanent or not) and the possibility of financial constraints on migration.