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Migration, Skill Composition and Growth

Author

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  • Kim, Young-Bae
  • Levine, Paul
  • Lotti, Emanuela

Abstract

The UK, with its relatively liberal immigration policies following recent enlargements, has been one of the main recipients of migrants from new EU member states. This paper poses the questions: what is the effect of immigration on a receiving economy such as the UK? Is the effect beneficial or adverse for growth? Does emigration have brain drain effects on sending economies? How differently would skilled (or unskilled) migration affect both receiving and sending economies? What factors would contribute to immigration/emigration benefits/costs and economic growth driven by migration? Who are the winners and losers in both the sending and host regions? We utilise a two-bloc endogenous growth model with labour mobility of different skill compositions to address these questions. We show that migration, in general, is beneficial to the receiving country and increases the world growth rate. With remittances, the sending country in aggregate can also benefit. The only exception is in the case of unskilled migration, which can actually have a detrimental impact on the world growth rate. This possibility however seems to be unlikely by our examination of migration trends. Winners are migrants, and the skill group in the region that sees its relative size decrease.

Suggested Citation

  • Kim, Young-Bae & Levine, Paul & Lotti, Emanuela, 2010. "Migration, Skill Composition and Growth," National Institute Economic Review, National Institute of Economic and Social Research, vol. 213, pages 5-19, July.
    • Handle: RePEc:cup:nierev:v:213:y:2010:i::p:r5-r19_14
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    Cited by:

    1. Sorin Manole & Laura Panoiu & Adriana Paunescu, 2017. "Impact of Migration upon a Receiving Country’s Economic Development," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 19(46), pages 670-670, August.
    2. Daniela Gabriela COZMA & Margareta BOCANCIA, 2019. "The trend of the Romanian migration flow explained by means of statistical models," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 11(3), pages 234-258, Octomber.
    3. Ikhenaode, Bright Isaac & Parello, Carmelo Pierpaolo, 2020. "Immigration and remittances in a two-country model of growth with labor market frictions," Economic Modelling, Elsevier, vol. 93(C), pages 675-692.

    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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