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The impact of differences in the levels of technology on international labor migration


In this paper we analyze the patterns of international labor migration in a two-country world where one country's production technology is superior to that of the other country. We exploit an overlapping-generations model which enables us to trace the relevant dynamic considerations. We find that in the absence of international capital movements labor will migrate from the technologically-inferior to the technologically-superior country unless the stationary autarkic equilibrium is characterized by over-investment relative to the Golden Rule and the long-run elasticity of the interest rate with respect to the technological level is sufficiently large, in which case migration will be from the technologically-superior country.

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This paper, presented at the 6th World Congress of the Econometric Society, Barcelona, August 22–29, 1990, is a revised version of Discussion Paper No. 34, Harvard University Migration and Development Program.

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Galor, O., Stark, O. The impact of differences in the levels of technology on international labor migration. J Popul Econ 4, 1–12 (1991).

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  • Interest Rate
  • Production Technology
  • Labor Migration
  • Golden Rule
  • International Capital