We study the long-run growth impact on the emigrants' country of origin of a change in immigration policy implemented by the host country. The policy change takes the form of an increase in the ratio of temporary to permanent visas issued. This policy change has two counteracting effects on the source country: first, it discourages human capital accumulation (which is harmful for development), and second, it facilitates the diffusion of knowledge (which encourages growth). We are able to analyze the determinants of an “optimal” (i.e. growth-maximizing) share of temporary visas.
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Find related papers by JEL classification: F22 - International Economics - - International Factor Movements and International Business - - - International Migration J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy
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