IDEAS home Printed from https://ideas.repec.org/p/cor/louvco/1993032.html
   My bibliography  Save this paper

Diverging Patterns in a Two Country Model with Endogenous Labor Migration

Author

Listed:
  • REICHLIN, Pietro

    (Universita’ di Napoli “ Frederico II”)

  • RUSTICHINI, Aldo

    (CORE, Université catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium and New York University)

Abstract

Models with endogenous growth due to production externalities imply that per capita output is positively affected by the size of the labor force (which we interpret as the stock of human capital). In this framework we investigate the effects of labor migration between two countries in the presence of free trade and perfect capital mobility. We show that any wage differential between countries sets up a continuous flow of migration of the workforce from the "low wage" country to the "high wage" country. This flow does not dampen over time and wage differentials become larger and larger. As a consequence, the former country will be permanently underdeveloped with respect to the latter. In a second part of the paper we modi fy the model to incorporate heterogeneous labor inputs (skilled and unskilled). Then, we study all the possible stable and unstable patterns of migration between countries and sectors and show that divergence as well as flow reversals are possible (the sending country may subsequentially become a receiving country).

Suggested Citation

  • REICHLIN, Pietro & RUSTICHINI, Aldo, 1993. "Diverging Patterns in a Two Country Model with Endogenous Labor Migration," CORE Discussion Papers 1993032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:1993032
    as

    Download full text from publisher

    File URL: https://uclouvain.be/en/research-institutes/immaq/core/dp-1993.html
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stolz, Yvonne & Baten, Jörg & Botelho, Tarcísio, 2011. "Growth effects of 19th century mass migrations: "Fome Zero" for Brazil," University of Tuebingen Working Papers in Economics and Finance 20, University of Tuebingen, Faculty of Economics and Social Sciences.
    2. Rodriguez-Pose, Andres & von Berlepsch, Viola, 2012. "When migrants rule: the legacy of mass migration on economic development in the US," CEPR Discussion Papers 9122, C.E.P.R. Discussion Papers.
    3. Reichlin, Pietro & Rustichini, Aldo, 1998. "Diverging patterns with endogenous labor migration," Journal of Economic Dynamics and Control, Elsevier, vol. 22(5), pages 703-728, May.
    4. Magris, Francesco & Russo, Giuseppe, 2009. "Selective immigration policies, human capital accumulation and migration duration in infinite horizon," Research in Economics, Elsevier, vol. 63(2), pages 114-126, June.
    5. 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.
    6. Faini, Riccardo, 1996. "Increasing returns, migrations and convergence," Journal of Development Economics, Elsevier, vol. 49(1), pages 121-136, April.
    7. Francesco Magris & Giuseppe Russo, 2005. "Selective immigration policies, human capital accumulation and migration duration in infinite horizon," PSE Working Papers halshs-00590772, HAL.

    More about this item

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • F2 - International Economics - - International Factor Movements and International Business
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cor:louvco:1993032. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alain GILLIS). General contact details of provider: http://edirc.repec.org/data/coreebe.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.