Endogenous Skill Formation and the Source Country Effects of Skilled Labor Emigration from Developing Countries

Hartmut Egger () and Gabriel Felbermayr

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: In this paper we set up a simple theoretical framework to study thepossible source country effects of skilled labor emigration fromdeveloping countries. We show that for given technologies, labor marketintegration necessarily lowers GDP per capita in a poor source countryof emigration, because it distorts the education decision ofindividuals. As pointed out by our analysis, a negative source countryeffect also materializes if all agents face identical emigrationprobabilities, irrespective of their education levels. This is in sharpcontrast to the case of exogenous skill supply. Allowing for humancapital spillovers, we further show that with social returns toschooling there may be a counteracting positive source country effect ifthe prospect of emigration stimulates the incentives to acquireeducation. Since, in general, the source country effects are not clear,we calibrate our model for four major source countries - Mexico, Turkey,Morocco, and the Philippines - and show that an increase in emigrationrates beyond those observed in the year 2000 is very likely to lower GDPper capita in poor economies.

Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Published in Jahrbücher für Nationalökonomie und Statistik 6 229(2009): pp. 706-729

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Endogenous Skill Formation and the Source Country Effects of Skilled Labor Emigration from Developing Countries (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:20530

Access Statistics for this paper

More papers in Munich Reprints in Economics from University of Munich, Department of Economics Ludwigstr. 28, 80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Tamilla Benkelberg ().