We study the impact of emigration on local labor markets, based on the construction of a 1,087-km road in northeastern Brazil. The new road has changed population density substantially, creating new towns along its path and increasing internal migration flows. We first use a reduced-form approach to estimate the effect of emigration on skill groups (defined by education and experience) -a 10 percentage point increase in the proportion of emigrants (which denotes a fall in labor supply) raises wages by 5%. Then, by using a structural approach, we estimate elasticities of substitution across types of labor and between capital and labor. Based on these estimates, we calculate the price elasticities and wage effects among groups -although emigration typically raises wages, complementary effects determine negative impacts on some municipalities. On average, we estimate an overall increase of 50% in local wages due to the construction of the road.