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Migration and dynamics: How a leakage of human capital lubricates the engine of economic growth

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  • Sorger, Gerhard
  • Stark, Oded
  • Wang, Yong

Abstract

This paper studies the growth dynamics of a developing country under migration. Assuming that human capital formation is subject to a strong enough, positive intertemporal externality, the prospect of migration will increase growth in the home country in the long run. If the external effect is less strong, there exists at least a level effect on the stock of human capital in the home country. In either case, the home country experiences a welfare gain, provided that migration is sufficiently restrictive. These results, obtained in a dynamic general equilibrium setting, extend and strengthen the results of Stark and Wang (2002) obtained in the context of a static model.

Suggested Citation

  • Sorger, Gerhard & Stark, Oded & Wang, Yong, 2013. "Migration and dynamics: How a leakage of human capital lubricates the engine of economic growth," International Review of Economics & Finance, Elsevier, vol. 28(C), pages 26-37.
    • Handle: RePEc:eee:reveco:v:28:y:2013:i:c:p:26-37
    DOI: 10.1016/j.iref.2013.05.005
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    1. Gerhard Glomm & B. Ravikumar, 2001. "Human capital accumulation and endogenous public expenditures," Canadian Journal of Economics, Canadian Economics Association, vol. 34(3), pages 807-826, August.
    2. Mountford, Andrew, 1997. "Can a brain drain be good for growth in the source economy?," Journal of Development Economics, Elsevier, vol. 53(2), pages 287-303, August.
    3. Stark, Oded & Wang, Yong, 2002. "Inducing human capital formation: migration as a substitute for subsidies," Journal of Public Economics, Elsevier, vol. 86(1), pages 29-46, October.
    4. Costas Azariadis & Allan Drazen, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(2), pages 501-526.
    5. Stark, Oded & Wang, Yong, 2002. "Inducing human capital formation: migration as a substitute for subsidies," Journal of Public Economics, Elsevier, vol. 86(1), pages 29-46, October.
    6. Galor, Oded & Stark, Oded, 1994. "Migration, Human Capital Formation, and Long-Run Output," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 59-68.
    7. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1998. "Human capital depletion, human capital formation, and migration: a blessing or a "curse"?," Economics Letters, Elsevier, vol. 60(3), pages 363-367, September.
    8. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Cited by:

    1. Pavel Ciaian & d'Artis Kancs, 2015. "Assessing the Social and Macroeconomic Impacts of Labour Market Integration: A Holistic Approach," JRC Research Reports JRC99645, Joint Research Centre.
    2. Michael Landesmann & Isilda Mara, 2021. "Interrelationships between Human Capital, Migration and Labour Markets in the Western Balkans: An Econometric Investigation," wiiw Working Papers 196, The Vienna Institute for International Economic Studies, wiiw.
    3. Kashif Iqbal & Muddassar Sarfraz & Khurshid, 2023. "Exploring the role of information communication technology, trade, and foreign direct investment to promote sustainable economic growth: Evidence from Belt and Road Initiative economies," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(3), pages 1526-1535, June.
    4. Kashif Iqbal & Hui Peng & Muhammad Hafeez & Khurshaid, 2020. "Analyzing the Effect of ICT on Migration and Economic Growth in Belt and Road (BRI) Countries," Journal of International Migration and Integration, Springer, vol. 21(1), pages 307-318, March.
    5. Ifanti, Amalia A. & Argyriou, Andreas A. & Kalofonou, Foteini H. & Kalofonos, Haralabos P., 2014. "Physicians’ brain drain in Greece: A perspective on the reasons why and how to address it," Health Policy, Elsevier, vol. 117(2), pages 210-215.
    6. Khraiche, Maroula, 2014. "Trade, capital adjustment and the migration of talent," International Review of Economics & Finance, Elsevier, vol. 34(C), pages 24-40.

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    More about this item

    Keywords

    Overlapping-generations growth model; Intertemporal human capital externalities; Long-run growth effect of the prospect of migration; Social welfare gains;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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