Endogenous Skill Formation and the Source Country Effects of Emigration
AbstractIn this paper we set up a simple theoretical framework to study the possible source country effects of skilled labor emigration. We show that for given technologies, labor market integration necessarily lowers GDP per capita in a poor source country of emigration, because it distorts the education decision of individuals. As pointed out by our analysis, a negative source country effect also materializes if all agents face identical emigration probabilities, irrespective of their education levels. This is in sharp contrast to the case of exogenous skill supply. Allowing for human capital spillovers, we further show that with social returns to schooling there may be a counteracting positive source country effect if the prospect of emigration stimulates the incentives to acquire education. Since, in general, the source country effects are not clear, we calibrate our model for four major source countries - Mexico, Turkey, Morocco, and the Philippines - and show that an increase in emigration rates beyond those observed in the year 2000 is very likely to lower GDP per capita in poor economies.
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Bibliographic InfoPaper provided by Department of Economics, University of Hohenheim, Germany in its series Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim with number 308/2009.
Length: 31 pages
Date of creation: Feb 2009
Date of revision:
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Postal: D-70593 Stuttgart
Web page: http://www.uni-hohenheim.de/institution/institut-fuer-economics-11
More information through EDIRC
Emigration; endogenous skill formation; source country effects;
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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-06-03 (All new papers)
- NEP-CWA-2009-06-03 (Central & Western Asia)
- NEP-DEV-2009-06-03 (Development)
- NEP-HRM-2009-06-03 (Human Capital & Human Resource Management)
- NEP-LAB-2009-06-03 (Labour Economics)
- NEP-MIG-2009-06-03 (Economics of Human Migration)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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