Integration, Mobility, and Human Capital Formation
15 Pages Posted: 7 Oct 2010
Date Written: September 30, 2010
In this note, we show that labour market integration can be a double-edged sword. In the presence of local human capital externalities, integration and the ensuing agglomeration of skilled labour can cause a decline in human capital and the total wage sum (net of education costs). In particular, integration depresses the incentives for some talented but immobile individuals to become skilled.
Keywords: human capital, migration, labour market integration, agglomeration
JEL Classification: F22, J24, J61, R23
Suggested Citation: Suggested Citation