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An Extended Solow Growth Model with Emigration: Transitional Dynamics and Skills Complementarity

Author

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  • Benteng ZOU

    (CREA, University of Luxembourg)

  • Patrice Pieretti

    (CREA, University of Luxembourg)

Abstract

In this paper we develop an extended Solow growth model with skilled labor emigration which aggregates different labor types from strict complementarity to perfect substitution. Except in two particular cases, balanced growth paths can only be attained asymptotically. We therefore derive an analytical characterization of the transitional dynamics of the model. We are thus able to study the impact of labor elasticity of substitution on the time pattern of per capita income in the country that experiences brain drain. Simulations show that the shape of per capita trajectory depends crucially on the degree of complementarity (substitutability) between labor skills. Given that no income trajectory dominates the others, there is room for policy issues by influencing the elasticity of substitution (Klump and Preissler, 2000).

Suggested Citation

  • Benteng ZOU & Patrice Pieretti, 2007. "An Extended Solow Growth Model with Emigration: Transitional Dynamics and Skills Complementarity," Economics Bulletin, AccessEcon, vol. 6(35), pages 1-11.
    • Handle: RePEc:ebl:ecbull:eb-07f20003
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    References listed on IDEAS

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    1. Christian Groth & Karl-Josef Koch & Thomas M. Steger, 2006. "Rethinking the Concept of Long-Run Economic Growth," Discussion Papers 06-06, University of Copenhagen. Department of Economics.
    2. Saint-Paul, Gilles, 2004. "The Brain Drain: Some Evidence from European Expatriates in the US," CEPR Discussion Papers 4680, C.E.P.R. Discussion Papers.
    3. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, vol. 64(1), pages 275-289, February.
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    Cited by:

    1. Arnaud Bourgain & Patrice Pieretti & Benteng Zou, 2008. "The Shortage of Medical Workers in Sub-Saharan Africa and Substitution Policy," DEM Discussion Paper Series 08-13, Department of Economics at the University of Luxembourg.

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    More about this item

    Keywords

    Brain drain;

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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