How does market access shape internal migration?
with Rodrigo Paillacar
We study the effect of economic geography on internal migration by assessing the impact of regional differences in access to markets on bilateral migration rates between the 27 Brazilian states. Bilateral migration rates are constructed from yearly individual data from 1993 to 2003. Migration rates are also computed separately for each sector and for different educational levels. State and sector-state specific market access indicators are estimated using trade data. Regions with low market access are found to push residents to migrate to regions with higher market access, where higher labor demand leads to better job opportunities. Low educated migrants are more sensitive to regional differences in market access than highly educated. All manufacturing workers react strongly to regional differences in market access of their own industry. Main results are robust to the control of self-selected migration and when taking into account the presence of zero-value migration flows. Simulations of a decrease in international and intranational trade costs lead to an important spatial reorientation of migration flows, whereas movements are stronger and more homogeneous across sectors in the case of intranational trade liberalization.