The size of the cliff at the border

• We measure the size of the policy-induced cliff at the border.
• The challenge lies in controlling for the correlation in policies across destinations.
• We estimate the effect of policies on bilateral migration flows through PPML.
• The use of aggregate data generates uncertainty over estimated elasticities.
• We provide bounds for the elasticities, in particular bounding policy externalities.

The scale of international migration flows depends on moving costs that are, in turn, influenced by host-country policies. This paper shows how to estimate the influence of policies upon bilateral migration flows to multiple destinations. We rely on a Poisson pseudo-maximum likelihood estimator to derive estimates that are consistent under more general distributional assumptions on the underlying RUM model than the ones commonly adopted in the literature. We derive bounds for the estimated direct and indirect effects of migration policies that reflect the uncertainty connected to the use of aggregate data, and we show that bilateral migration flows can be highly sensitive to the immigration policies set by other destination countries, an externality that we are able to quantify.