Modelling international migration flows in a simple core-periphery model: theory and policy applications
The present work attempts to provide a more realistic description of international labour migration within a simple core-periphery model à-la Fujita, Krugman and Venables (1999). The choice of this benchmark model is motivated by the key role it plays in the most recent and sophisticated dynamic spatial general equilibrium model, such as the Regional Holistic model (RHOMOLO) model developed by the European Commission (EC) for simulating policy scenario related to the European Union (EU) cohesion policies and for evaluating its implications on the economies of the Member States of the Union. The first part of the work consists in a concise review of the relevant international trade theories and the main international migration theories. In the second part, after a concise description of the simple 2-region core-periphery model developed by Fujita et al. (1999), the migration law à-la Krugman (1991a) is modified to include other drivers, such as political instability and climate change in the less developed country. In the last part, the evolution of the key endogenous variables of the model will be simulated and some policy implications of the model will be discussed. This work shows that, although it has been used the simplest (and less complete) baseline model, the introduction of the sociopolitical and the environmental driver for international migration plays a key role in the dynamic spatial general equilibrium approach.
