Essays on immigration and international trade

Poloni Sant Anna, Vinicios

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https://hdl.handle.net/2142/116155 Copy

Description

Title

Essays on immigration and international trade

Author(s)

Poloni Sant Anna, Vinicios

Issue Date

2022-06-09

Director of Research (if dissertation) or Advisor (if thesis)

Bernhardt, Dan

Doctoral Committee Chair(s)

Bernhardt, Dan

Committee Member(s)

• Krasa, Stefan
• Mitchener, Kris
• Howard, Greg

Department of Study

Economics

Discipline

Economics

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

• Economics
• Immigration
• International Trade.

Abstract

This dissertation contains three chapters that study topics on immigration and international trade. In Chapter 1, we study the impact of immigration on local housing. We study one of the largest ethnically motivated migration shocks in US history, the United States' Mexican repatriation of the 1930s. Using a novel automated matching technique to link houses across the 1930 and 1940 Censuses, we show that repatriating Mexicans during the Great Depression significantly affected housing in various dimensions. Employing an instrumental variable approach, we show that Mexican-occupied houses experienced a disproportionately large devaluation of their house values and rents in cities more exposed to the repatriation. The repatriation mattered for aggregate outcomes in US cities: it decreased building permit growth rates, the median house value growth, and the median rent growth at the city level. Our results suggest that repatriations have a long-lasting impact, leaving a footprint on the local economy. In Chapter 2, we study the effect of the bilateral trade integration with China on wage inequality in Brazil. Previous studies have documented the contribution of trade opening to the decline in inequality since the 1990s, driven primarily by cross-firm pay differences. Using more recent data, we find a sharper reduction in wage inequality over the 2000s, parallel to China’s accession to the WTO. Our reduced-form analysis of the China shock suggests that some firms are harmed by import competition, while others profit from increased exports and cheaper inputs. We rationalize these patterns by using a theoretical framework that includes sector heterogeneity in trade exposure and firm-level selection into imports. Our calibrated model indicates that the rise of China leads to a reduction in cross-firm wage inequality in Brazil since the cross-sectoral effect - which tends to benefit low-wage sectors and hurt high-wage sectors - dominates the within-sector - increase in inequality due to a rise in importing and exporting firms. In Chapter 3, we investigate the determinants of international trade in two broad sectors, manufacturing and services. We build a unified theoretical framework that incorporates a demand bias towards services and a difference in the degree of national product differentiation between the two sectors. Demand bias implies two non-standard bilateral trade determinants: per capita income and income inequality in the importing country. Differences in national product differentiation yield a higher elasticity of bilateral trade in manufactures for the exporting country's economic size than the trade in services. Our empirical model also includes two non-standard trade-cost variables: a measure of internet penetration and virtual proximity (the number of bilateral hyperlinks). The results support our unified model's predictions and illustrate that virtual proximity---thus far ignored in most gravity models---is a strong predictor of aggregate trade in both services and manufacturing. We also find that physical distance is an important determinant of bilateral trade in manufacturing and services, even while controlling for virtual proximity.

Graduation Semester

2022-08

Type of Resource

Thesis

Copyright and License Information

Copyright 2022 Vinicios Poloni Sant Anna

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