Globalization and Formal Sector Migration in Brazil

Summary Comprehensive linked employer-employee data allow us to study the relationship between domestic formal sector migration in Brazil and globalization. Considerable worker flows in the formal labor market during 1997-2001 are directed toward lower income regions--the reverse flows of those often posited for informal labor markets. Estimation of the worker's multi-choice migration problem shows that previously unobserved employer covariates are significant predictors associated with migration flows. These results support the idea that globalization acts on internal migration through job stability at exporting establishments and employment opportunities at locations with a concentration of foreign owned establishments. A 1% increase in exporter employment predicts a 0.3% reduced probability of migration. A 1% increase in the concentration of foreign owned establishments at potential destinations is associated with a 0.2% increase in the migration rate.