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Externalities, Human Capital Formation, and Corrective Migration Policy

Author

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  • Stark, Oded
  • Wang, Yong

Abstract

When productivity is fostered by an individual’s own human capital as well as by the economy-wide average level of human capital, individuals under-invest in human capital. A strictly positive probability of migration to a richer country raises both the level of human capital formed by optimizing individuals in the home country and the average level of human capital of non-migrants in the country. Conditions are provided under which the welfare of all workers i higher with migration than in its absence. A well-controlled, restrictive migration policy can enhance welfare and nudge the economy toward the social optimum.

Suggested Citation

  • Stark, Oded & Wang, Yong, 1999. "Externalities, Human Capital Formation, and Corrective Migration Policy," Discussion Papers 279853, University of Bonn, Center for Development Research (ZEF).
    • Handle: RePEc:ags:ubzefd:279853
    DOI: 10.22004/ag.econ.279853
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    References listed on IDEAS

    as
    1. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1997. "A brain gain with a brain drain," Economics Letters, Elsevier, vol. 55(2), pages 227-234, August.
    2. Stark, Oded, 1995. "Return and Dynamics: The Path of Labor Migration when Workers Differ in their Skills and Information Is Asymmetric," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 97(1), pages 55-71.
    3. Razin,Assaf & Sadka,Efraim (ed.), 1999. "The Economics of Globalization," Cambridge Books, Cambridge University Press, number 9780521622684, Enero.
    4. repec:zbw:espost:233466 is not listed on IDEAS
    5. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1998. "Human capital depletion, human capital formation, and migration: a blessing or a "curse"?," Economics Letters, Elsevier, vol. 60(3), pages 363-367, September.
    6. Chau, Nancy H. & Stark, Oded, 1999. "Human-Capital Formation, Asymmetric Information, and the Dynamics of International Migration," EconStor Open Access Book Chapters, in: The Economics of Globalization: Policy Perspectives from Public Economics, pages 333-370, ZBW - Leibniz Information Centre for Economics.
    7. World Bank, 1995. "World Development Report 1995," World Bank Publications - Books, The World Bank Group, number 5978, August.
    8. repec:bla:scandj:v:97:y:1995:i:1:p:55-71 is not listed on IDEAS
    9. Nasr, Mamdouh, 1999. "Assessing Desertification and Water Harvesting in the Middle East and North Africa: Policy Implications," Discussion Papers 279852, University of Bonn, Center for Development Research (ZEF).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Institutional and Behavioral Economics; Labor and Human Capital;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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