Migrant network effect and economic development

Sokchea Lim and Channary Khun

Economics Letters, 2023, vol. 225, issue C

Abstract: We compare the development effect of information cost reduction with that of migration cost reduction in a two-sector, macro-dynamic framework that incorporates a migrant network effect. Numerical analyses show that although the reduction in information cost can stimulate inflows of FDI that benefit the traded sector, the loss of labor due to migration cost reduction hampers the expansion of the sector, leading to a long-run macroeconomic contraction for the developing country.

Keywords: Labor migration; Remittances; Migrant network effect; FDI; Development (search for similar items in EconPapers)
JEL-codes: E13 F21 F22 O11 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:225:y:2023:i:c:s0165176523000617

DOI: 10.1016/j.econlet.2023.111036

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