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MIGRATION, CONGESTION, AND GROWTH

Published online by Cambridge University Press:  29 June 2018

Leonid V. Azarnert*
Affiliation:
National Research University Higher School of Economics
*Corresponding
Address correspondence to: Leonid V. Azarnert, Department of Economics, National Research University Higher School of Economics, 3A Kantemirovskaya St., St Petersburg, 194100, Russia; e-mail: Leonid.Azarnert@gmail.com.

Abstract

This article analyzes the effect of migration from a less advanced economy to a more advanced economy on economic growth. The analysis is performed in a two-country growth model with endogenous fertility, in which congestion diseconomies are incorporated. The model shows that out-migration increases fertility and reduces human capital in the source economy. At the same time, in-migration reduces fertility and can increase or decrease the average level of human capital in the host economy. I show how migration affects the inter-temporal evolution of human capital in the world economy. I also demonstrate that a tax imposed on immigrants in the host economy can increase human capital accumulation in the receiving and sending economies and the world as a whole.

Type
Articles
Copyright
Copyright © Cambridge University Press 2018 

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Footnotes

I would like to thank Oded Galor, Daniel Tsiddon and two anonymous referees for valuable suggestions. I also thank participants at the 8th FIW research conference “International Economics” (Vienna 2015), the 2016 CEUS workshop on International Trade, Labor Markets and Finance in Europe (Vallendar/Koblenz) and EconWorld 2017 (Rome) for their comments.

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