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Human Capital, Migration and Remittance in Developing Countries: A General Equilibrium Approach

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  • Gao, Lili
  • Chen, Lihui
  • Wang, Dianshuang

Abstract

The paper develops a three-sector model with Harris–Todaro type unemployment to examine the consequences of an increase of migrants’ human capital on remittance within a small open dual economy. By using indirect utility functions, the paper endogenizes the remittance. The theoretical analysis shows that an increase of human capital level of rural migrants increases their income, urban consumption and remittance, while its effect on the proportion of remittance in migrants’ income depends on the impact of remittance on agricultural production.

Suggested Citation

  • Gao, Lili & Chen, Lihui & Wang, Dianshuang, 2024. "Human Capital, Migration and Remittance in Developing Countries: A General Equilibrium Approach," Asian Journal of Agricultural Extension, Economics & Sociology, Asian Journal of Agricultural Extension, Economics & Sociology, vol. 42(1), pages 1-9.
    • Handle: RePEc:ags:ajaees:367870
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    References listed on IDEAS

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    1. Riccardo Faini, 2007. "Remittances and the Brain Drain: Do More Skilled Migrants Remit More?," The World Bank Economic Review, World Bank, vol. 21(2), pages 177-191, May.
    2. Naufal, George S, 2007. "Who Remits? The Case of Nicaragua," IZA Discussion Papers 3081, Institute of Labor Economics (IZA).
    3. Richard C. Jones, 1998. "Introduction: The Renewed Role of Remittances in the New World Order," Economic Geography, Taylor & Francis Journals, vol. 74(1), pages 1-7, January.
    4. Hoddinott, John, 1994. "A Model of Migration and Remittances Applied to Western Kenya," Oxford Economic Papers, Oxford University Press, vol. 46(3), pages 459-476, July.
    5. Funkhouser, Edward, 1995. "Remittances from International Migration: A Comparison of El Salvador and Nicaragua," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 137-146, February.
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