Externalities, Human Capital Formation, and Corrective Migration Policy

Oded Stark and Yong Wang

No 279853, Discussion Papers from University of Bonn, Center for Development Research (ZEF)

Abstract: When productivity is fostered by an individual’s own human capital as well as by the economy-wide average level of human capital, individuals under-invest in human capital. A strictly positive probability of migration to a richer country raises both the level of human capital formed by optimizing individuals in the home country and the average level of human capital of non-migrants in the country. Conditions are provided under which the welfare of all workers i higher with migration than in its absence. A well-controlled, restrictive migration policy can enhance welfare and nudge the economy toward the social optimum.

Keywords: Institutional and Behavioral Economics; Labor and Human Capital (search for similar items in EconPapers)
Pages: 17
Date: 1999-08-02
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Inducing human capital formation: migration as a substitute for subsidies (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ubzefd:279853

DOI: 10.22004/ag.econ.279853

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