Migration and Dynamics: How a Leakage of Human Capital Lubricates the Engine of Economic Growth

ZEF - Discussion Papers on Development Policy No. 181

31 Pages Posted: 6 Aug 2013

See all articles by Gerhard Sorger

Gerhard Sorger

University of Vienna - Faculty of Business, Economics, and Statistics

Oded Stark

University of Bonn; University of Warsaw; University of Tuebingen

Yong Wang

City University of Hong Kong (CityU) - Department of Economics & Finance

Date Written: July 2013

Abstract

This paper studies the growth dynamics of a developing country under migration. Assuming that human capital formation is subject to a strong enough, positive intertemporal externality, the prospect of migration will increase growth in the home country in the long run. If the external effect is less strong, there exists at least a level effect on the stock of human capital in the home country. In either case, the home country experiences a welfare gain, provided that migration is sufficiently restrictive. These results, obtained in a dynamic general equilibrium setting, extend and strengthen the results of Stark and Wang (2002) obtained in the context of a static model.

Keywords: Overlapping-generations growth model, Intertemporal human capital externalities, Long-run growth effect of the prospect of migration, Social welfare gains

JEL Classification: F22, I30, J24, J61, O15, O40

Suggested Citation

Sorger, Gerhard and Stark, Oded and Wang, Yong, Migration and Dynamics: How a Leakage of Human Capital Lubricates the Engine of Economic Growth (July 2013). ZEF - Discussion Papers on Development Policy No. 181, Available at SSRN: https://ssrn.com/abstract=2306026 or http://dx.doi.org/10.2139/ssrn.2306026

Gerhard Sorger (Contact Author)

University of Vienna - Faculty of Business, Economics, and Statistics ( email )

Vienna, A-1210
Austria

Oded Stark

University of Bonn

Walter-Flex-Str. 3
Bonn, NRW 53113
Germany

University of Warsaw

Dluga Street 44/50
Warsaw, 00-241
Poland

University of Tuebingen

Wilhelmstr. 19
Tuebingen, Baden Wuerttemberg 72074
Germany

Yong Wang

City University of Hong Kong (CityU) - Department of Economics & Finance ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

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