The Macroeconomic Impact of Skilled Emigration from South Africa: A CGE Analysis
AbstractSouth Africa faces the dual problem of large inflows of illegal immigrants and outflows of skilled emigrants. This situation potentially has serious implications for the domestic labour market and economy as a whole. In this paper we measure the impact of skilled emigration and the subsequent loss in primary factor productivity on the South African economy using a dynamic computable general equilibrium (CGE) model. Results indicate that skilled emigration in the absence of any programmes to counter this flow of workers has a generally negative effect on the economy. Industries with the greatest exposure to the investment and export sectors as well as those with the highest concentration of skilled workers are shown to be most affected. We also use simple and intuitive back-of-the-envelope equations to enhance our understanding of the mechanisms driving the modelâ€™s macroeconomic results. These results justify the governmentâ€™s current efforts to retain and attract skilled labour as part of the ASGISA framework.
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Bibliographic InfoPaper provided by Economic Research Southern Africa in its series Working Papers with number 166.
Length: 17 pages
Date of creation: 2010
Date of revision:
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This paper has been announced in the following NEP Reports:
- NEP-AFR-2010-03-13 (Africa)
- NEP-ALL-2010-03-13 (All new papers)
- NEP-CMP-2010-03-13 (Computational Economics)
- NEP-HRM-2010-03-13 (Human Capital & Human Resource Management)
- NEP-MAC-2010-03-13 (Macroeconomics)
- NEP-MIG-2010-03-13 (Economics of Human Migration)
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- Rob Hodgson & Jacques Poot, 2011. "New Zealand Research on the Economic Impacts of Immigration 2005-2010: Synthesis and Research Agenda," CReAM Discussion Paper Series 1104, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
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