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How does Emigration affect Labor Markets? Evidence from Road Construction in Brazil

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  • Chein, Flávia
  • Assunção, Juliano Junqueira
Abstract
We study the impact of emigration on local labor markets, based on the construction of a 1,087km road in northeastern Brazil. The new road has changed population substantially, creating new cities along its path and increasing internal migration flows. We first use a reduced-form approach to estimate the effect of emigration on skill groups (defined by education and experience) - a 10 percentage point increase in the proportion of emigrants raises wages by 5%. Then, using a structural approach, we estimate cross effects among groups - although emigration typically raises wages, complementary effects determine negative impacts in some municipalities.

Suggested Citation

  • Chein, Flávia & Assunção, Juliano Junqueira, 2016. "How does Emigration affect Labor Markets? Evidence from Road Construction in Brazil," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 36(2), November.
    • Handle: RePEc:sbe:breart:v:36:y:2016:i:2:a:47740
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