# 14-084/VI (2014-07-07)

Author(s)
Laura Hering, Erasmus University Rotterdam, the Netherlands; Rodrigo Paillacar, University of Cergy-Pontoise, France
Keywords:
Regional migration, international trade, market access, Brazil
JEL codes:
F16, F66, R12, R23

This paper investigates how internal migration is a
affected by Brazil's increased integration into the world economy. We analyze the impact of regional differences in access to foreign demand on sector-specific bilateral migration rates between the Brazilian states for the years 1995 to 2003. Using international trade data, we compute a foreign market access indicator at the sectoral level, which is exogenous to domestic migration. A higher foreign market access is associated with a higher local labor demand and attracts workers via two potential channels: higher wages and new job opportunities. Our results show that both channels play a significant role in internal migration. Further, we find a heterogeneous impact across industries according to their comparative advantage on the world market. However, the impact of market access is robust only for low-educated wor kers. This finding is consistent with the fact that Brazil is exporting mainly goods that are intensive in unskilled labor.