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Labor Supply, Migration, and Long-Term Development

  • Lucas Bretschger

    ()

This article analyzes the impact of the supply of skilled and unskilled labor on the growth rate of open economies. Using an expansion-in-varieties framework, the model distinguishes between a long-term equilibrium and a medium-term adjustment path. It is demonstrated that the dynamic effects of labor supply are different in a model with expanding varieties in the consumption sector from those in a model with expanding varieties in the production sector. In addition, the outcome depends on the elasticities of substitution in production as well as the countries' production shares in world goods markets. It is shown that, in general, the supply of unskilled labor is likely to have an unfavorable effect on long-term development. Copyright Kluwer Academic Publishers 2001

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File URL: http://hdl.handle.net/10.1023/A:1026502909466
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Article provided by Springer in its journal Open Economies Review.

Volume (Year): 12 (2001)
Issue (Month): 1 (January)
Pages: 5-27

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Handle: RePEc:kap:openec:v:12:y:2001:i:1:p:5-27
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100323

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  1. Faini, Riccardo, 1996. "Increasing returns, migrations and convergence," Journal of Development Economics, Elsevier, vol. 49(1), pages 121-136, April.
  2. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
  3. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  4. Dolado, Juan J. & Goria, Alessandra & Ichino, Andrea, 1993. "Immigration, Human Capital and Growth in the Host Country: Evidence from Pooled Country Data," CEPR Discussion Papers 875, C.E.P.R. Discussion Papers.
  5. Robert C. Feenstra, 1990. "Trade and Uneven Growth," NBER Working Papers 3276, National Bureau of Economic Research, Inc.
  6. De Long, J Bradford & Summers, Lawrence H, 1991. "Equipment Investment and Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 445-502, May.
  7. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
  8. Elise Brezis & Paul Krugman, 1996. "Immigration, investment, and real wages," Journal of Population Economics, Springer, vol. 9(1), pages 83-93, February.
  9. Lundborg, Per & Segerstrom, Paul S., 2002. "The growth and welfare effects of international mass migration," Journal of International Economics, Elsevier, vol. 56(1), pages 177-204, January.
  10. Barro, Robert J. & Lee, Jong-Wha, 1993. "International comparisons of educational attainment," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 363-394, December.
  11. Nadeem U. Haque & Se-Jik Kim, 1995. "“Human Capital Flight”: Impact of Migration on Income and Growth," IMF Staff Papers, Palgrave Macmillan, vol. 42(3), pages 577-607, September.
  12. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
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