This paper considers the allocation of two types of individuals differentiated by levels of talent within and between two countries when they choose to be workers or entrepreneurs. The equilibrium with international migrations requires both countries to be sufficiently different in talent endowments and is consistent with individuals moving in one or in both directions whether they are entrepreneurs or workers. Average welfare per capita falls in the country losing highly talented individuals and rises in the country attracting them. However, in both countries, the liberalization of migrations for immigrants, emigrants or both is always supported by majority voting.
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number
CESifo Working Paper No. 1484.
Find related papers by JEL classification: F20 - International Economics - - International Factor Movements and International Business - - - General F22 - International Economics - - International Factor Movements and International Business - - - International Migration J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
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