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Labor Supply, Migration, and Long-Term Development

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  • Lucas Bretschger

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Abstract

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

Suggested Citation

  • Lucas Bretschger, 2001. "Labor Supply, Migration, and Long-Term Development," Open Economies Review, Springer, vol. 12(1), pages 5-27, January.
  • Handle: RePEc:kap:openec:v:12:y:2001:i:1:p:5-27 DOI: 10.1023/A:1026502909466
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    References listed on IDEAS

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    1. Feenstra, Robert C., 1996. "Trade and uneven growth," Journal of Development Economics, Elsevier, pages 229-256.
    2. Dolado, Juan J & Goria, Alessandra & Ichino, Andrea, 1994. "Immigration, Human Capital and Growth in the Host Country: Evidence from Pooled Country Data," Journal of Population Economics, Springer;European Society for Population Economics, pages 193-215.
    3. 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.
    4. Lundborg, Per & Segerstrom, Paul S., 2002. "The growth and welfare effects of international mass migration," Journal of International Economics, Elsevier, pages 177-204.
    5. Barro, Robert J. & Lee, Jong-Wha, 1993. "International comparisons of educational attainment," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 363-394, December.
    6. Robert B. Barsky & J. Bradford De Long, 1991. "Forecasting Pre-World War I Inflation: The Fisher Effect and the Gold Standard," The Quarterly Journal of Economics, Oxford University Press, pages 815-836.
    7. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, pages 297-308.
    8. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    9. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, pages 1667-1717.
    10. Elise Brezis & Paul Krugman, 1996. "Immigration, investment, and real wages," Journal of Population Economics, Springer;European Society for Population Economics, pages 83-93.
    11. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, pages 297-308.
    12. J. Bradford De Long & Lawrence H. Summers, 1991. "Equipment Investment and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 445-502.
    13. Faini, Riccardo, 1996. "Increasing returns, migrations and convergence," Journal of Development Economics, Elsevier, pages 121-136.
    14. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Citations

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    Cited by:

    1. repec:hal:wpaper:halshs-01252165 is not listed on IDEAS
    2. Stephen Drinkwater & Paul Levine & Emanuela Lotti & Joseph Pearlman, 2007. "The Immigration Surplus Revisited In A General Equilibrium Model With Endogenous Growth," Journal of Regional Science, Wiley Blackwell, vol. 47(3), pages 569-601.
    3. repec:leo:wpaper:2235 is not listed on IDEAS
    4. Ekrame Boubtane & Jean-Christophe Dumont & Christophe Rault, 2016. "Immigration and economic growth in the OECD countries 1986–2006," Oxford Economic Papers, Oxford University Press, vol. 68(2), pages 340-360.
    5. Marcus H. Böhme & Sarah Kups, 2017. "The economic effects of labour immigration in developing countries: A literature review," OECD Development Centre Working Papers 335, OECD Publishing.
    6. Cat Moody, 2006. "Migration and Economic Growth: a 21st Century Perspective," Treasury Working Paper Series 06/02, New Zealand Treasury.
    7. repec:aes:amfeco:v:46:y:2017:i:19:p:670 is not listed on IDEAS
    8. Lucas Bretschger & Thomas M. Steger, 2004. "The dynamics of economic integration: Theory and policy," International Economics and Economic Policy, Springer, vol. 1(2), pages 119-134, January.
    9. Stephen Drinkwater & Paul Levine & Emanuela Lotti & Joseph Pearlman, 2003. "The Economic Impact of Migration: A Survey," School of Economics Discussion Papers 0103, School of Economics, University of Surrey.
    10. Ekrame Boubtane & Jean-Christophe Dumont & Christophe Rault, 2016. "Document de Recherche du Laboratoire d'Économie d'Orléans "Immigration and economic growth in the OECD countries 1986- 2006"
      [Document de Recherche du Laboratoire d'Economie d'Orléans &qu
      ," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01252165, HAL.

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