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International Migration, Human Capital Composition And Middle-Income Traps

Author

Listed:
  • ZHAOBIN FAN

    (International Business School, Jinan University, 601 Huangpu W Ave, Guangzhou Shi, Guangdong Sheng, P. R. China)

  • HUI LI

    (School of Mathematics, University of Birmingham, Ring Rd W, Birmingham B15 2TS, UK)

Abstract

One of the most interesting and debateable topics in China’s economic growth is whether China’s economy would be hindered by a middle-income trap. This paper addresses this topic by analyzing the link between international skilled migration and the middle-income trap. Our study has extended the model proposed by [De la Croix, D. and Docquier F. (2012). Do Brain Drain and Poverty Result from Coordination Failures? Journal of Economic Growth, 17(1) 1–26.] and accounted for the importance of heterogeneity of human capital emphasized by [Jones, F. (2008). The Knowledge Trap: Human Capital and Development Reconsidered. NBER Working Paper No. 14138, Northwestern University.] Results have demonstrated that in the presence of externalities in the formation of human capital, there possibly exist four steady-state development paths in the dynamic system due to coordination failures. These four paths include: (i) the unskilled labor equilibrium which is characterized by low-income and significant loss of skilled labor, (ii) the generalist equilibrium with lower-middle income and significant loss of specialists, (iii) the specialist equilibrium with the characteristics of upper-middle income and significant loss of generalists; and (iv) the skilled equilibrium with high income and insignificant loss of skilled workers. Amongst them, the generalist equilibrium and specialist equilibrium represent two types of middle-income trap.

Suggested Citation

  • Zhaobin Fan & Hui Li, 2019. "International Migration, Human Capital Composition And Middle-Income Traps," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(04), pages 883-897, September.
    • Handle: RePEc:wsi:serxxx:v:64:y:2019:i:04:n:s0217590817450060
    DOI: 10.1142/S0217590817450060
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    References listed on IDEAS

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