Gains and costs from an increasing integration of output and labor markets : an analysis of market size and transnational networks

This Ph.D. thesis aims to challenge stereotypes and obvious facts concerning the increasing integration of output and labor markets by quantifying the economic implications of migration and trade for the destination countries as well as their redistributive effects on the countries of origin through information transmission and international trade. From a methodological point of view, this thesis interlinks new trade theory and international migration. The first two chapters quantify the welfare resulting from an expansion of product varieties available to consumers (named the market size effect). The breakdown of national boundaries and factor mobility lead consumers to enter in an integrated global consumption market where then can better match their preferences to their consumption thanks to the diversity of products available. The last chapter focuses on assessing the effect of the unique social network migration creates on business opportunities and output market integration. The first chapter shows that even though price and income play an important role to determine the pattern of consumption in a country, an alteration of consumer's environment has key implications in the development of sectors to the detriment of others. The last two chapters show that migrants are not only workers affecting the wages of natives; they are also consumers stimulating the host economy and a unique source of information developing business opportunities. Those conclusions suggest opening a space for dialogues between countries, institutions and private sector in order to rethink migration policies.