IDEAS home Printed from https://ideas.repec.org/a/bla/jregsc/v47y2007i3p569-601.html
   My bibliography  Save this article

The Immigration Surplus Revisited In A General Equilibrium Model With Endogenous Growth

Author

Listed:
  • Stephen Drinkwater
  • Paul Levine
  • Emanuela Lotti
  • Joseph Pearlman

Abstract

ABSTRACT We revisit the influential work of Borjas (1995) on the economic gain to the host population from immigration—“the immigration surplus.” We develop his analysis by using a general equilibrium endogenous growth model with endogenous capital and several sectors, including an R&D sector driving growth. Skilled immigration leads to a bigger R&D sector share resulting in higher long‐term growth. If skilled labor and physical capital are complements, this growth gain increases. Growth effects on the immigration surplus dominate the purely static effects of Borjas, but are not sufficient to eliminate the emergence of losers (skilled natives) within the host population.

Suggested Citation

  • Stephen Drinkwater & Paul Levine & Emanuela Lotti & Joseph Pearlman, 2007. "The Immigration Surplus Revisited In A General Equilibrium Model With Endogenous Growth," Journal of Regional Science, Wiley Blackwell, vol. 47(3), pages 569-601, August.
    • Handle: RePEc:bla:jregsc:v:47:y:2007:i:3:p:569-601
    DOI: 10.1111/j.1467-9787.2007.00521.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-9787.2007.00521.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1467-9787.2007.00521.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ethan Lewis, 2005. "Immigration, Skill Mix, and the Choice of Technique," Working Papers 05-04, Center for Economic Studies, U.S. Census Bureau.
    2. Canova, Fabio, 1994. "Statistical Inference in Calibrated Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 9(S), pages 123-144, Suppl. De.
    3. Masao Ogaki & Carmen M. Reinhart, 1998. "Measuring Intertemporal Substitution: The Role of Durable Goods," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 1078-1098, October.
    4. George J. Borjas, 2021. "The Economic Benefits from Immigration," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 13, pages 411-430, World Scientific Publishing Co. Pte. Ltd..
    5. Lundborg, Per & Segerstrom, Paul S., 2002. "The growth and welfare effects of international mass migration," Journal of International Economics, Elsevier, vol. 56(1), pages 177-204, January.
    6. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    7. Fabio Canova & Eva Ortega, 1996. "Testing calibrated general equilibrium models," Economics Working Papers 166, Department of Economics and Business, Universitat Pompeu Fabra.
    8. Segerstrom, Paul S, 1998. "Endogenous Growth without Scale Effects," American Economic Review, American Economic Association, vol. 88(5), pages 1290-1310, December.
    9. Fabio Canova & Morten Ravn, 2000. "The Macroeconomic Effects of German Unification: Real Adjustments and the Welfare State," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(3), pages 423-460, July.
    10. N/A, 2001. "The World Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 176(1), pages 35-60, April.
    11. Per Lundborg & Paul S. Segerstrom, 2000. "International Migration and Growth in Developed Countries: A Theoretical Analysis," Economica, London School of Economics and Political Science, vol. 67(268), pages 579-604, November.
    12. N/A, 2001. "The World Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 175(1), pages 29-58, January.
    13. Lucas Bretschger, 2001. "Labor Supply, Migration, and Long-Term Development," Open Economies Review, Springer, vol. 12(1), pages 5-27, January.
    14. Li, Chol-Won, 2000. "Endogenous vs. Semi-endogenous Growth in a Two-R&D-Sector Model," Economic Journal, Royal Economic Society, vol. 110(462), pages 109-122, March.
    15. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550, January.
    16. Stephen L. Parente & Edward C. Prescott, 2002. "Barriers to Riches," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661306, April.
    17. Anderton, Bob, 1999. "Innovation, Product Quality, Variety, and Trade Performance: An Empirical Analysis of Germany and the UK," Oxford Economic Papers, Oxford University Press, vol. 51(1), pages 152-167, January.
    18. George J. Borjas, 2005. "The Labor-Market Impact of High-Skill Immigration," American Economic Review, American Economic Association, vol. 95(2), pages 56-60, May.
    19. Chui, Michael & Levine, Paul & Pearlman, Joseph, 2001. "Winners and losers in a North-South model of growth, innovation and product cycles," Journal of Development Economics, Elsevier, vol. 65(2), pages 333-365, August.
    20. Michael C. Burda & Jennifer Hunt, 2001. "From Reunification to Economic Integration: Productivity and the Labor Market in Eastern Germany," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(2), pages 1-92.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Carmelo Pierpaolo Parello, 2022. "Migration and growth in a Schumpeterian growth model with creative destruction [A model of growth through creative destruction]," Oxford Economic Papers, Oxford University Press, vol. 74(4), pages 1139-1166.
    2. David de la Croix & Frederic Docquier, 2015. "An Incentive Mechanism to Break the Low-skill Immigration Deadlock," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(3), pages 593-618, July.
    3. Michael A Clemens, 2022. "The economic and fiscal effects on the United States from reduced numbers of refugees and asylum seekers," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 38(3), pages 449-486.
    4. Isaac Ehrlich & Jinyoung Kim, 2015. "Immigration, Human Capital Formation, and Endogenous Economic Growth," Journal of Human Capital, University of Chicago Press, vol. 9(4), pages 518-563.
    5. Sari Pekkala Kerr & William R. Kerr, 2011. "Economic Impacts of Immigration: A Survey," Finnish Economic Papers, Finnish Economic Association, vol. 24(1), pages 1-32, Spring.
    6. Erik Hornung, 2014. "Immigration and the Diffusion of Technology: The Huguenot Diaspora in Prussia," American Economic Review, American Economic Association, vol. 104(1), pages 84-122, January.
    7. Jacques Poot, 2007. "Demographic Change and Regional Competitiveness: The Effects of Immigration and Ageing," Population Studies Centre Discussion Papers dp-64, University of Waikato, Te Ngira Institute for Population Research.
    8. Ayoung Kim & Brigitte S. Waldorf & Natasha T. Duncan, 2017. "U.S. Immigration and Policy Brain Waste," Working papers 262884, Purdue University, Department of Agricultural Economics.
    9. Thangavelu, Shandre Mugan, 2017. "Labour Market Integration with the World: Case of Singapore," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 32(3), pages 723-758.
    10. 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.
    11. Xavier Chojnicki & Frédéric Docquier & Lionel Ragot, 2011. "Should the US have locked heaven’s door?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(1), pages 317-359, January.
    12. Erik Hornung, 2012. "Human Capital, Technology Diffusion, and Economic Growth - Evidence from Prussian Census Data," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 46.
    13. Clark, Ken & Drinkwater, Stephen, 2013. "UK Migration Policy and Migration from Eastern Partnership Countries," IZA Discussion Papers 7665, Institute of Labor Economics (IZA).
    14. Wido Geis, 2009. "Does Educational Choice Erode the Immigration Surplus?," ifo Working Paper Series 80, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    15. Ayoung Kim & Brigitte S. Waldorf & Natasha T. Duncan, 2021. "US immigration policy and brain waste," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(2), pages 209-236, April.
    16. Cat Moody, 2006. "Migration and Economic Growth: a 21st Century Perspective," Treasury Working Paper Series 06/02, New Zealand Treasury.
    17. Ken Clark & Stephen Drinkwater, 2014. "Labour migration to the UK from Eastern partnership countries," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-19, December.
    18. 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.
    19. Paul Levine & Emanuela Lotti & Joseph Pearlman & Richard Pierse, 2010. "Growth And Welfare Effects Of World Migration," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(5), pages 615-643, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paul Levine & Emanuela Lotti & Joseph Pearlman & Richard Pierse, 2010. "Growth And Welfare Effects Of World Migration," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(5), pages 615-643, November.
    2. 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.
    3. 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.
    4. Isaac Ehrlich & Jinyoung Kim, 2015. "Immigration, Human Capital Formation, and Endogenous Economic Growth," Journal of Human Capital, University of Chicago Press, vol. 9(4), pages 518-563.
    5. Carmelo Pierpaolo Parello, 2022. "Migration and growth in a Schumpeterian growth model with creative destruction [A model of growth through creative destruction]," Oxford Economic Papers, Oxford University Press, vol. 74(4), pages 1139-1166.
    6. Tetsugen Haruyama & Ken-ichi Hashimoto, 2020. "Innovators and imitators in a world economy," Journal of Economics, Springer, vol. 130(2), pages 157-186, July.
    7. Nicholas Bloom & Charles I. Jones & John Van Reenen & Michael Webb, 2020. "Are Ideas Getting Harder to Find?," American Economic Review, American Economic Association, vol. 110(4), pages 1104-1144, April.
    8. Adriana Di Liberto, 2007. "Convergence and Divergence in Neoclassical Growth Models with Human Capital," Economia politica, Società editrice il Mulino, issue 2, pages 289-322.
    9. Ekrame Boubtane & Jean-Christophe Dumont & Christophe Rault, 2016. "Immigration and economic growth in the OECD countries 1986–2006," Oxford Economic Papers, Oxford University Press, vol. 68(2), pages 340-360.
    10. Ekrame Boubtane & Jean-Christophe Dumont & Christophe Rault, 2013. "Immigration and economic growth in the OECD countries 1986-2006," Post-Print halshs-00800617, HAL.
    11. Sener, Fuat, 2008. "R&D policies, endogenous growth and scale effects," Journal of Economic Dynamics and Control, Elsevier, vol. 32(12), pages 3895-3916, December.
    12. Resmini, Laura, 2006. "Theoretical and Methodological Study on Comparative Advantages in Dynamic Growth Regions, Convergence and Inequalities Patterns," Papers DYNREG03, Economic and Social Research Institute (ESRI).
    13. Marcus H. Böhme & Sarah Kups, 2017. "The economic effects of labour immigration in developing countries: A literature review," OECD Development Centre Working Papers 335, OECD Publishing.
    14. Papageorgiou, Chris & Perez-Sebastian, Fidel, 2006. "Dynamics in a non-scale R&D growth model with human capital: Explaining the Japanese and South Korean development experiences," Journal of Economic Dynamics and Control, Elsevier, vol. 30(6), pages 901-930, June.
    15. Cat Moody, 2006. "Migration and Economic Growth: a 21st Century Perspective," Treasury Working Paper Series 06/02, New Zealand Treasury.
    16. Michael Benarroch & Manish Pandey, 2017. "The Impact of Imports and Exports on the Size and Composition of Government Expenditures," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(3), pages 57-68, March.
    17. Lucas Bretschger & Thomas M. Steger, 2004. "The dynamics of economic integration: Theory and policy," International Economics and Economic Policy, Springer, vol. 1(2), pages 119-134, January.
    18. Sener, Fuat, 2006. "Labor market rigidities and R&D-based growth in the global economy," Journal of Economic Dynamics and Control, Elsevier, vol. 30(5), pages 769-805, May.
    19. Kurt A. Hafner, 2011. "Trade Liberalization and Technology Diffusion," Review of International Economics, Wiley Blackwell, vol. 19(5), pages 963-978, November.
    20. Juan R. Perilla Jiménez & Thomas H. W. Ziesemer, 2024. "Technology adoption, innovation policy and catching-up," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-24, April.

    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

    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:bla:jregsc:v:47:y:2007:i:3:p:569-601. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-4146 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.