The balassa-samuelson hypothesis and elderly migration

Hernando Zuleta, Oscar Avila-Montealegre and Mauricio Rodríguez ()

No 5267, Documentos de Trabajo from Universidad del Rosario

Abstract: We present an Overlapping Generations Model with two final goods: tradable goods are produced with a standard Cobb-Douglas production function and non-tradable goods are produced with linear production function where the only factor is labor. We maintain the fundamental assumption of factor mobility between sectors so model is consistent with the Balassa-Samuelson hypothesis. Given the general equilibrium structure of our model we can examine the effect of the saving rate on migration and non-tradable relative prices. Under this setting, we find that the elderly have incentives to migrate from economies where productivity is high to economies with low productivity because of the lower cost of living. In more general terms the elderly migration is likely to go from rich to poor countries. We also find that, for poor countries, the elderly migration has a positive effect in wages and capital accumulation.

Keywords: tradable and non-tradable; overlapping generations; Balassa-Samuelson; elderly migration (search for similar items in EconPapers)
JEL-codes: E21 E22 E23 E24 F21 F22 F43 J14 O41 (search for similar items in EconPapers)
Pages: 30
Date: 2009-02-06
New Economics Papers: this item is included in nep-age, nep-dev, nep-dge, nep-int and nep-mig
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http://repository.urosario.edu.co/bitstream/handle/10336/10942/5267.pdf

Related works:
Journal Article: The Balassa-Samuelson Hypothesis and Elderly Migration (2014)
Journal Article: The Balassa-Samuelson Hypothesis and Elderly Migration (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000092:005267

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