The Simple Analytics of Neoclassical Growth with Migration

Government of the Italian Republic (Italy), Ministry of Economy and Finance, Department of the Treasury Working Paper No. 9

23 Pages Posted: 29 Nov 2011  

Luca Correani

Università degli studi della Tuscia

Fabio Di Dio

Sogei S.p.a.

Stefano Patri

University of Rome I

Date Written: November 29, 2011

Abstract

This paper investigates the economic consequences of migration in the Ramsey-type dynamic optimizing context. In contrast to Hazari and Sgro (2003) conclusions, we show that with a Cobb-Douglas production function migration unambiguously reduces per-capita domestic consumption growth, whereas necessarily raises the long-run per-capita consumption of domestic residents when production is 'sufficiently' capital intensive. Our findings are supported by several empirical studies and confirmed by simulation analyses in an international context, suggesting that changes in technological adjustment in response to migrants inflows may take some years to translate into productivity, generating some crowding out effects. The gains for natives materialize in the long run when the specialization of natives adjusts, firms invest in capital and adopt appropriate technologies.

Keywords: migration, domestic consumption, growth

JEL Classification: F2, 04

Suggested Citation

Correani, Luca and Di Dio, Fabio and Patri, Stefano, The Simple Analytics of Neoclassical Growth with Migration (November 29, 2011). Government of the Italian Republic (Italy), Ministry of Economy and Finance, Department of the Treasury Working Paper No. 9. Available at SSRN: https://ssrn.com/abstract=1965954

Luca Correani (Contact Author)

Università degli studi della Tuscia ( email )

Rettorato, Via S.M.in Gradi n.4
VIiterbo
Italy

Fabio Di Dio

Sogei S.p.a. ( email )

Via Mario Carucci n. 99 e 85
Roma, 00143
Italy
+39068544 9092 (Phone)

Stefano Patri

University of Rome I ( email )

Piazzale Aldo Moro, 5
Rome, 00185
Italy

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