This study aims to empirically analyze the impact of trade barriers on migration fluctuations against the backdrop of the global re-emergence of protectionism, thereby investigating their interactive relationship. Specifically, the analysis focuses on...
This study aims to empirically analyze the impact of trade barriers on migration fluctuations against the backdrop of the global re-emergence of protectionism, thereby investigating their interactive relationship. Specifically, the analysis focuses on whether trade barriers exercise a moderating effect on the relationship between macroeconomic indicators (GDP growth rate and unemployment rate) and net migration, and whether differential impacts exist across different types of trade barrier policies, namely tariffs and non-tariff barriers (NTBs).
For the empirical analysis, we utilized annual panel data for up to 196 countries from 1995 to 2019, spanning the period from the establishment of the World Trade Organization (WTO) until the major outbreak of the COVID-19 pandemic. Tariffs were measured using the weighted average applied tariff rate, while non-tariff barriers were measured by the number of SPS and TBT notifications reported to the WTO. We employed the Two-Way Fixed Effects Model to control for country and year specific inherent characteristics. To account for the time lag between trade policy implementation and changes in the net migration, a one-period lag was applied to the dependent variable.
The main findings are as follows:
First, trade barriers were confirmed to have a statistically significant moderating effect on the impact of the unemployment rate on net migration. This effect shows that trade barriers mitigate the negative influence of the unemployment rate. Second, a difference in the magnitude of the moderating effect exists between tariffs and non-tariff barriers, with the moderating effect of tariffs being relatively stronger than that of non-tariff barriers.
These results are significant as they empirically establish a link between trade barrier policies and immigration, subjects which have traditionally been discussed in isolation. Furthermore, the findings suggest the potential for trade barrier measures to bring about unexpected job preservation effects in the labor market. This implies that, when designing future trade barrier policies, governments should comprehensively consider their interactive effects with immigration policy.