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Migration, Skill Composition and Growth

Published online by Cambridge University Press:  26 March 2020

Young-Bae Kim ,
Paul Levine  and
Emanuela Lotti
Young-Bae Kim
Affiliation:
University of Surrey
Paul Levine
Affiliation:
University of Surrey
Emanuela Lotti*
Affiliation:
University of Southampton and University of Surrey
*
E-mail: e.lotti@soton.ac.uk
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Abstract

The UK, with its relatively liberal immigration policies following recent enlargements, has been one of the main recipients of migrants from new EU member states. This paper poses the questions: what is the effect of immigration on a receiving economy such as the UK? Is the effect beneficial or adverse for growth? Does emigration have brain drain effects on sending economies? How differently would skilled (or unskilled) migration affect both receiving and sending economies? What factors would contribute to immigration/emigration benefits/costs and economic growth driven by migration? Who are the winners and losers in both the sending and host regions? We utilise a two-bloc endogenous growth model with labour mobility of different skill compositions to address these questions. We show that migration, in general, is beneficial to the receiving country and increases the world growth rate. With remittances, the sending country in aggregate can also benefit. The only exception is in the case of unskilled migration, which can actually have a detrimental impact on the world growth rate. This possibility however seems to be unlikely by our examination of migration trends. Winners are migrants, and the skill group in the region that sees its relative size decrease.

Keywords

Migrationlabour mobilityskill compositioneconomic growthF22F43J24J61O41
Type
Research Articles
Information
National Institute Economic Review , Volume 213 , July 2010 , pp. R5 - R19
Copyright
Copyright © 2010 National Institute of Economic and Social Research

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Footnotes

The authors would like to thank Stephen Drinkwater for very helpful comments.

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