Trade, aid and migrations: Some basic policy issues

The link between trade policy and international migration is explored using data from the United States and Europe. "We conclude that restrictive trade policies in industrialised countries have most likely added to migration pressures. We then turn to the broader question of the effects of income growth in the sending countries on the propensity to migrate. We argue that, in relatively poor countries, an increase in income will be associated with higher migration flows. For middle income countries, however, income growth will lead to lower migrations. In the medium run, therefore, the relationship between development levels, as measured by GDP per capita, and the propensity to migrate follows an inverse-U pattern. Econometric analysis of aggregate migration flows from Southern Europe provides considerable support for such conjecture."