The impact of immigration on international trade: a meta‐analysis

Abstract

Since the early 1990s many studies have been conducted on the impact of international migration on international trade, predominantly from the host country perspective. Because most studies have adopted broadly the same specification, namely a log‐linear gravity model of export and import flows augmented with the logarithm of the stock of immigrants from specific source countries as an additional explanatory variable, the resulting elasticities are broadly comparable and yield a set of estimates that is well suited to meta‐analysis. We therefore compile and analyze in this paper the distribution of immigration elasticities of imports and exports across 48 studies that yielded 300 estimates. The results confirm that immigration boosts trade, but its impact is lower on trade in homogeneous goods. An increase in the number of immigrants by 10 percent increases the volume of trade by about 1‐2 percent The migrant elasticity of imports is on average similar to that of exports. The estimates are affected by the choice of some covariates, the nature of the data (cross‐section or panel) and the estimation technique. Elasticities vary between countries in ways that cannot be explained by study characteristics; host country differences in immigration policies do apparently matter for the trade impact. The trade‐enhancing impact of migration appears to be greater for migration between countries of different levels of development than between developed countries.