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Differential Migration Prospects, Skill Formation, and Welfare

Author

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  • Oded Stark
  • Roman Zakharenko

Abstract

This paper develops a one sector, two-input model with endogenous human capital formation. The two inputs are two types of skilled labor: “engineering,” which exerts a positive externality on total factor productivity, and “law,” which does not. The paper shows that a marginal prospect of migration by engineers increases human capital accumulation of both types of workers (engineers and lawyers), and also the number of engineers who remain in the country. These two effects are socially desirable, since they move the economy from the (inefficient) free-market equilibrium towards the social optimum. The paper also shows that if the externality effect of engineering is sufficiently powerful, everyone will be better off as a consequence of the said prospect of migration, including the engineers who lose the migration “lottery,” and even the individuals who practice law.
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Suggested Citation

  • Oded Stark & Roman Zakharenko, 2012. "Differential Migration Prospects, Skill Formation, and Welfare," Review of International Economics, Wiley Blackwell, vol. 20(4), pages 657-673, September.
    • Handle: RePEc:bla:reviec:v:20:y:2012:i:4:p:657-673
    DOI: j.1467-9396.2012.01045.x
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Why India should let engineers and doctors emigrate
      by Economic Logician in Economic Logic on 2012-01-11 21:28:00

    Citations

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    Cited by:

    1. Oda, Masao & Okawa, Masayuki, 2018. "A model for liberalizing nursing and trade," Japan and the World Economy, Elsevier, vol. 46(C), pages 50-55.
    2. Baran Siyahhan & Hamed Ghoddusi, 2022. "Optimal investment in human capital under migration uncertainty," Review of International Economics, Wiley Blackwell, vol. 30(2), pages 422-449, May.
    3. Stark, Oded & Byra, Lukasz & Casarico, Alessandra & Uebelmesser, Silke, 2017. "A critical comparison of migration policies: Entry fee versus quota," Regional Science and Urban Economics, Elsevier, vol. 66(C), pages 91-107.
    4. Khraiche, Maroula & Boudreau, James, 2020. "Can lower remittance costs improve human capital accumulation in Africa?," Journal of Policy Modeling, Elsevier, vol. 42(5), pages 1000-1021.
    5. Zakharenko, Roman, 2012. "Human capital acquisition and international migration in a model of educational market," Regional Science and Urban Economics, Elsevier, vol. 42(5), pages 808-816.
    6. Gega Todua, 2017. "Financing Education Abroad: A Developing Country Perspective," CERGE-EI Working Papers wp608, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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