Working Paper: NBER ID: w21699
Authors: Isaac Ehrlich; Jinyoung Kim
Abstract: Census data from international sources covering 77% of the world’s migrant population indicate that the skill composition of migrants in major destination countries, including the US, has been rising over the last 4 decades. Moreover, the population share of skilled migrants has been approaching or exceeding that of skilled natives. We offer theoretical propositions and empirical tests consistent with these trends via a general-equilibrium model of endogenous growth where human capital, population, income growth and distribution, and migration trends are endogenous. We derive new insights about the impact of migration on long-term income growth and distribution, and the net benefits to natives in both destination and source countries.
Keywords: Immigration; Human Capital; Economic Growth; Endogenous Growth
JEL Codes: F22; F43; O15; O4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Skill composition of migrants (J61) | Long-term income growth in destination countries (F29) |
| Skilled migration (F22) | Human capital formation (J24) |
| Skilled migration (F22) | Economic growth (O49) |
| Rising share of skilled migrants (F22) | Decrease in income inequality among natives in destination countries (J69) |
| Increased skilled migration (F22) | Raises average human capital levels (J24) |
| Increased average human capital levels (J24) | Enhances overall economic performance (O57) |