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Migration, community networks and welfare in neoclassical growth models

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  • Parello, Carmelo Pierpaolo
  • Ikhenaode, Bright Isaac

Abstract

This paper proposes a Ramsey-Like model of growth with endogenous migration to study the effects of migration networks on the macroeconomy and welfare of hosting economies. In the model, migration is assumed to be made of two different components: a first, forward-looking component in which the rate of net migration depends on the wage gap between countries; a second, backward-looking component in which in-migration depends on the immigration history of the destination country through the formation of immigrant networking. We find that the model exhibits a unique saddle-path steady-state equilibrium and that introducing pro-immigration policies aimed at enhancing community networks have asymmetric impacts on the welfare level of natives and immigrants that hinge on the relative size of immigrant communities.

Suggested Citation

  • Parello, Carmelo Pierpaolo & Ikhenaode, Bright Isaac, 2021. "Migration, community networks and welfare in neoclassical growth models," Journal of Macroeconomics, Elsevier, vol. 70(C).
    • Handle: RePEc:eee:jmacro:v:70:y:2021:i:c:s0164070421000689
    DOI: 10.1016/j.jmacro.2021.103369
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    References listed on IDEAS

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    Cited by:

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    Keywords

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    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • F1 - International Economics - - Trade
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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