International Migration Projections across Skill Levels in the Shared Socioeconomic Pathways

Abstract

International migration is closely tied to demographic, socioeconomic, and environmental factors and their interaction with migration policies. Using a combination of a gravity econometric model and an overlapping generations model, we estimate the probability of bilateral migration among 160 countries in the period of 1960 to 2000 and use these findings to project international migration flows and their implications for income inequality within and between countries in the 21st century under five shared socioeconomic pathways (SSPs). Our results show that international migration increases welfare in developing countries, and closes the inequality gap both within and between low-skilled and high-skilled labor in these countries as well. In most developed countries, on the contrary, international migration increases the inequality gap and slightly reduces output. These changes are not uniform, and vary significantly across countries depending on their population growth and human capital development trajectories. Overall, while migration is strongly affected by inequality between developed and developing countries, it has an ambiguous impact on inequality within and between countries.