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The effects of migration and pollution externality on cognitive skills in Caribbean economies: a Theoretical analysis

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  • Lesly Cassin

Abstract

Caribbean Small Island Developing States (SIDS) face specific social, economic and environmental vulnerabilities. This paper provides a simple overlapping generations model with migration and intergenerational transfers in an economy where production generates pollution. This pollution hampers the cognitive skills of the children and thus the efficiency of human capital accumulation in the economy. Therefore the model developped in this work introduces kea features of Caribbean SIDS in order to exacerbate the dynamics between demography – i.e. migration and human capital accumulation – and pollution. Results reveal that the usual gain from migration in terms of human capital was no longer possible because of the environmental externality. Indeed, in most of the cases, in presence of the environmental externality, per capita variables (utility, production and capital) are decreased by migration, while the aggregated production can be enhanced thanks to the demographic growth that occurs with migration. Moreover, it has been shown that the conditions to have a profitable environmental tax depend on the pollution intensity of the economy. Finally, the interactions between the emigration rate and the form of intergenerational transfers – i.e. solidarity from the domestic area and/or from the diaspora – have an impact on the scale of the reduction of human capital due to migration. Thus, in this model a gain from an increase in the rate of emigration is still possible but only if migration is already very high.

Suggested Citation

  • Lesly Cassin, 2018. "The effects of migration and pollution externality on cognitive skills in Caribbean economies: a Theoretical analysis," EconomiX Working Papers 2018-30, University of Paris Nanterre, EconomiX.
  • Handle: RePEc:drm:wpaper:2018-30
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    References listed on IDEAS

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    More about this item

    Keywords

    Pollution; Demographics; Economic Development; Migration; Caribbean; Small Island Developing States;

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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