This paper investigates how internal migration is 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 measure 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 observed impact is driven by the strong reaction of low-educated workers to changes in market access. This finding is consistent with the fact that Brazil is exporting mainly goods that are intensive in unskilled labor.
|Number of pages||26|
|Journal||The World Bank Economic Review|
|Publication status||Published - 2016|