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Growth and Welfare Effects of East-West European Migration

Author

Listed:
  • Paul Levine

    (University of Surrey)

  • Emanuela Lotti

    (University of Surrey)

  • Joseph Pearlman

    (London Metropolitan University)

  • Richard Pierse

    (University of Surrey)

Abstract

Using a calibrated two-bloc endogenous growth model of the European economy, we assess the growth and welfare impact of East-West European migration of different skill compositions. The East has a lower total factor productivity and a lower endowment of skilled labour. Migration can induce two growth-enhancing effects: an efficiency effect from the more e±cient use of labour in the West and a sectoral reallocation effect from a fall in the Western skilled-unskilled wage rates. Despite growth gains there are both winners (migrants, the representative Western non-migrant household) and losers (the representative Eastern household remaining). Remittances can see the latter group joining the winners.

Suggested Citation

  • Paul Levine & Emanuela Lotti & Joseph Pearlman & Richard Pierse, 2007. "Growth and Welfare Effects of East-West European Migration," School of Economics Discussion Papers 1507, School of Economics, University of Surrey.
  • Handle: RePEc:sur:surrec:1507
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    File URL: https://repec.som.surrey.ac.uk/2007/DP15-07.pdf
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    More about this item

    Keywords

    migration; endogenous growth; welfare; immigration surplus; emigration;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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