Entrepreneurship and the Efficiency Effects of Migration

Gustavo González

Working Papers Central Bank of Chile from Central Bank of Chile

Abstract: This paper constructs and calibrates a parsimonious two-country dynamic general equilibrium model of entrepreneurship and migration. Countries differ in their TFP and degree of financial frictions. The model is calibrated to replicate the economic and migratory situation of the United States and the rest of the world. I evaluate the impact of changing migration barriers on GDP per capita, average firms productivity, business ownership rates, and consumption on both regions. I find that migration barriers have a non-monotone impact on the average productivity of the host country, depending this on the entrepreneurial skill and mass of people that move in and are displaced by entrants. A migration policy that favors the entry of foreign people with a higher entrepreneurial drive would reduce profits of native entrepreneurs, but would make the economy more efficient and would lift the welfare of workers of the host economy.

Date: 2023-07
New Economics Papers: this item is included in nep-dge, nep-ent, nep-fdg, nep-int, nep-lab, nep-mig and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:chb:bcchwp:985

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