Trade, Foreign Direct Investment and International Flow of Labor: OECD Countries

Abstract

This paper examines the effect of trade on the international movement of labor using migration data into 28 OECD countries. The effect of foreign direct investment on the flow of labor is also

considered. The results show that the increased exports of a country lower the migration outflow,

whereas increased imports work in the opposite direction. But the rise of bilateral trade raises

migration flow into the partner country. Total foreign direct investment into a country does not affect

the outflow of labor. But increased bilateral investment raises the movement of people into the

investing country.