| Summary: | This paper investigates how internal migration is affected by Brazil’s increased integration
into the world economy.We analyze the impact of regional differences in access to foreign
demand on sector-specific bilateral migration rates between the Brazilian states for the
years 1995 to 2003. Using international trade data, we compute a foreign market access
measure at the sectoral level, which is exogenous to domestic migration. A higher foreign
market access is associated with a higher local labor demand and attracts workers via two
potential channels: higher wages and new job opportunities. Our results show that both
channels play a significant role in internal migration. Further, we find a heterogeneous
impact across industries, according to their comparative advantage on the world market.
However, the observed impact is driven by the strong reaction of low-educated workers to
changes in market access. This finding is consistent with the fact that Brazil is exporting
mainly goods that are intensive in unskilled labor.
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