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Growth And Welfare Effects Of World Migration

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  • Paul Levine
  • Emanuela Lotti
  • Joseph Pearlman
  • Richard Pierse

Abstract

Using a two‐bloc endogenous growth model calibrated to two generic sending and receiving countries of equal size, we assess the growth and welfare impact of world migration flows of different skill compositions. The sending country (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 efficient use of labour in the receiving country (West) and a sectoral reallocation effect from a fall in the host country 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.

Suggested Citation

  • Paul Levine & Emanuela Lotti & Joseph Pearlman & Richard Pierse, 2010. "Growth And Welfare Effects Of World Migration," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(5), pages 615-643, November.
  • Handle: RePEc:bla:scotjp:v:57:y:2010:i:5:p:615-643
    DOI: 10.1111/j.1467-9485.2010.00533.x
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    File URL: https://doi.org/10.1111/j.1467-9485.2010.00533.x
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    Cited by:

    1. Wilson, E. J. & Jayanthakumaran, K. & Verma, R., 2012. "Demographics, Labor Mobility, and Productivity," ADBI Working Papers 387, Asian Development Bank Institute.
    2. Timo Baas & Marjan Aikimbaeva, 2016. "Macroeconomic Stability and the Single European Labor Market," EcoMod2016 9555, EcoMod.
    3. Bright Isaac Ikhenaode & Carmelo Pierpaolo Parello, 2018. "Endogenous Migration in a Two-Country Model with Labor Market Frictions," Working Papers 184, University of Rome La Sapienza, Department of Public Economics.
    4. Bergh, Andreas, 2014. "Explaining Cross-Country Differences in Labor Market Gaps between Immigrants and Natives in the OECD," Working Paper Series 1036, Research Institute of Industrial Economics.

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