Growth and Welfare Effects of World Migration

29 Pages Posted: 7 Sep 2010  

Paul Levine

University of Surrey - Department of Economics; Centre for Economic Policy Research (CEPR)

Emanuela Lotti

University of Surrey - Department of Economics

Joseph Pearlman

London Metropolitan University - Department of Economics, Finance and International Business (EFIB)

Richard G. Pierse

University of Surrey - Department of Economics; National Institute of Economic and Social Research (NIESR)

Date Written: 2009-09-28

Abstract

Using a two-bloc endogenous growth model calibrated to two generic sending and receiving countries of equal size, we assess the growth and welfare impact of world migration flows of different skill compositions. The sending country (East) has a lower total factor productivity and a lower endowment of skilled labour. Migration can induce two growth-enhancing effects: an efficiency effect from the more efficient use of labour in the receiving country (West) and a sectoral reallocation effect from a fall in the host country skilled–unskilled wage rates. Despite growth gains, there are both winners (migrants, the representative Western non-migrant household) and losers (the representative Eastern household remaining). Remittances can see the latter group joining the winners.

Suggested Citation

Levine, Paul and Lotti, Emanuela and Pearlman, Joseph and Pierse, Richard G., Growth and Welfare Effects of World Migration (2009-09-28). Scottish Journal of Political Economy, Vol. 57, Issue 5, pp. 615-643, November 2010. Available at SSRN: https://ssrn.com/abstract=1670381 or http://dx.doi.org/10.1111/j.1467-9485.2010.00533.x

Paul L. Levine (Contact Author)

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

University of Surrey - Department of Economics ( email )

Guildford
Surrey GU2 7XH
United Kingdom
+44 1483 259 380 Ext. 2773 (Phone)
+44 1483 259 548 (Fax)

Emanuela Lotti

University of Surrey - Department of Economics ( email )

Guildford
Surrey GU2 7XH
United Kingdom

Joseph G. Pearlman

London Metropolitan University - Department of Economics, Finance and International Business (EFIB) ( email )

Economics Subject Group, LMBS
London EC2M 6SQ, EC2M 6SQ
United Kingdom

Richard G. Pierse

University of Surrey - Department of Economics ( email )

Guildford
Surrey GU2 7XH
United Kingdom

National Institute of Economic and Social Research (NIESR) ( email )

2 Dean Trench Street
Smith Square
London SW1P 3HE
United Kingdom

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