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Growth and Welfare Effects of East-West European Migration

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Author Info

  • Paul Levine

    (University of Surrey)

  • Emanuela Lotti

    (University of Surrey)

  • Joseph Pearlman

    (London Metropolitan University)

  • Richard Pierse

    (University of Surrey)

Abstract

Using a calibrated two-bloc endogenous growth model of the European economy, we assess the growth and welfare impact of East-West European migration of different skill compositions. The East has a lower total factor productivity and a lower endowment of skilled labour. Migration can induce two growth-enhancing effects: an efficiency effect from the more e±cient use of labour in the West and a sectoral reallocation effect from a fall in the Western skilled-unskilled wage rates. Despite growth gains there are both winners (migrants, the representative Western non-migrant household) and losers (the representative Eastern household remaining). Remittances can see the latter group joining the winners.

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File URL: http://www.fahs.surrey.ac.uk/economics/discussion_papers/2007/DP15-07.pdf
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Bibliographic Info

Paper provided by School of Economics, University of Surrey in its series School of Economics Discussion Papers with number 1507.

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Length: 40 pages
Date of creation: Nov 2007
Date of revision:
Handle: RePEc:sur:surrec:1507

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Keywords: migration; endogenous growth; welfare; immigration surplus; emigration;

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