Equipping Immigrants: Migration Flows and Capital Movements
The large current account and capital account imbalances among OECD countries continue to attract attention among policy makers and researchers. This paper explores the extent to which migration-related capital flows can explain the movements and magnitudes of current and capital account imbalances in OECD countries. Migrants must be equipped with machines, and the resulting demands for capital are likely, all else being equal, to generate cross-border flows of capital. We analyze the empirical predictions of a simple model with endogenous capital and labor flows. This model allows for exogenous variation in the supply of capital and labor as well as in local production conditions. Empirically, we find that the observed correlation in investment rates, capital and labor flows are roughly consistent with a model in which capital is elastically supplied at a constant world interest rate, but where the supply of migrants to local economies varies exogenously. We then examine how much the increase in net migration rates contributed to the increase in the US current account deficit since 1960. Between 1960 and 2000, the US current account declined by about 4% of annual GDP. The increase in migration contributed about 1% of GDP to this decline.
|Date of creation:||Jul 2008|
|Date of revision:|
|Contact details of provider:|| Postal: Williamstown, MA 01267|
Phone: 413 597 2476
Fax: 413 597 4045
Web page: http://econ.williams.edu
More information through EDIRC
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John F. Helliwell, 2004.
"Demographic Changes and International Factor Mobility,"
NBER Working Papers
10945, National Bureau of Economic Research, Inc.
- John F. Helliwell, 2004. "Demographic changes and international factor mobility," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, issue Aug, pages 369-420.
- Stuart J. Wilson, 2003. "A Dynamic General Equilibrium Analysis of Migration and Capital Formation: The Case of Canada," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 6(2), pages 455-481, April.
- Martin Feldstein & Chair, 2004. "General discussion : demographic changes and international factor mobility," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, issue Aug, pages 437-446.
- Francesc Ortega & Giovanni Peri, 2009.
"The Causes and Effects of International Migrations: Evidence from OECD Countries 1980-2005,"
96, University of California, Davis, Department of Economics.
- Francesc Ortega & Giovanni Peri, 2009. "The Causes and Effects of International Migrations: Evidence from OECD Countries 1980-2005," NBER Working Papers 14833, National Bureau of Economic Research, Inc.
- Taylor, A.M., 1991.
"Capital Flows to the New World as an Intergenerational Transfer,"
Harvard Institute of Economic Research Working Papers
1579, Harvard - Institute of Economic Research.
- Taylor, Alan M & Williamson, Jeffrey G, 1994. "Capital Flows to the New World as an Intergenerational Transfer," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 348-71, April.
- Alan M. Taylor & Jeffrey G. Williamson, 1991. "Capital Flows to the New World as an Intergenerational Transfer," NBER Historical Working Papers 0032, National Bureau of Economic Research, Inc.
- Higgins, Matthew, 1998. "Demography, National Savings, and International Capital Flows," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 343-69, May.
- Christian Dustmann & Tim Hatton & Ian Preston, 2005. "The Labour Market Effects of Immigration," Economic Journal, Royal Economic Society, vol. 115(507), pages F297-F299, November.
- B. Douglas Bernheim & John B. Shoven, 1991. "National Saving and Economic Performance," NBER Books, National Bureau of Economic Research, Inc, number bern91-2, February.
- Mario Izquierdo & Juan Jimeno & Juan Rojas, 2010.
"On the aggregate effects of immigration in Spain,"
SERIEs: Journal of the Spanish Economic Association,
Springer;Spanish Economic Association, vol. 1(4), pages 409-432, September.
- Susan M. Collins, 1991. "Saving Behavior in Ten Developing Countries," NBER Chapters, in: National Saving and Economic Performance, pages 349-376 National Bureau of Economic Research, Inc.
- Matthew Higgins & Jeffrey G. Williamson, 1996. "Asian Demography and Foreign Capital Dependence," NBER Working Papers 5560, National Bureau of Economic Research, Inc.
- Alan M. Taylor, 2004. "Commentary : demographic changes and international factor mobility," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, issue Aug, pages 421-435.
- Timothy J. Hatton & Jeffrey G. Williamson, 2008. "Global Migration and the World Economy: Two Centuries of Policy and Performance," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582775, March.
When requesting a correction, please mention this item's handle: RePEc:wil:wileco:2008-18. 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: (Stephen Sheppard)
If references are entirely missing, you can add them using this form.