Migration and welfare: a very simple model

✍ Scribed by Roberto Cellini

• Publisher: John Wiley and Sons
• Year: 2007
• Tongue: English
• Weight: 125 KB
• Volume: 19
• Category: Article
• ISSN: 0954-1748
• DOI: 10.1002/jid.1330

✦ Synopsis

Abstract

The paper presents a very simple model of migration, relying on three widely accepted points: first, labour productivity and wages in a country depend on the present average human capital; second, agents maximise their utility, so that migration decisions depend on the wage gap across economies; third, the larger the personal human capital, the higher the propensity is to migrate (ceteris paribus). The model shows that migration through its external effects always lowers the welfare in the sending country, while the effects on the receiving country can be positive or negative. As a consequence, selfish developed economies could desire a larger migration than the optimal level for a benevolent World Planner. This calls for international coordination concerning the regulation of migration flows. Copyright © 2007 John Wiley & Sons, Ltd.