Immigration and Economic Growth: Do Origin and Destination Matter?

Kang, Youngho and Kim, Byung-Yeon (2012): Immigration and Economic Growth: Do Origin and Destination Matter?

Abstract

This paper assesses the heterogeneous effects of immigration on economic growth depending on both the origin and the destination countries. Following the development of a simple growth model augmented by the embodied human capital of immigrants, we estimate the growth equation using a gravity-style instrument variable approach and the dynamic system-GMM estimator. We find that immigration from developed economies positively affects the economic growth of the host countries. Furthermore, the growth-enhancing effect of immigration is significantly larger when immigration flows from developed to developing economies than when it does to those that include both developed and developing economies. We interpret these results as evidence of immigrants from developed countries bringing with them – upon entry – their advanced knowledge on technology and institutions into the developing countries that host them.

• Item Type: MPRA Paper
• Language: English
• Keywords: International migration;Economic Growth
• Subjects: F - International Economics > F2 - International Factor Movements and International Business > F22 - International Migration; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J61 - Geographic Labor Mobility ; Immigrant Workers; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General

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