and Calin Rechea
Per Lundborg: Trade Union Institute for Economic Research, Postal: FIEF, Wallingatan 38, SE-111 24 Stockholm, Sweden
Calin Rechea: Department of Economics, Postal: School of Economics and Commercial Law, Göteborg University, SE-411 80 Göteborg, Sweden
Abstract: We analyze the theoretical effects on growth and welfare in transition economies of emigration of educated and uneducated labor, of higher emigration probability, etc. Using a Grossman-Helpman growth model, we show that the prospects of labor market integration with the EU raises the expected returns to education, stimulate human capital formation and thus raise the growth rate in the candidate countries. However, given this expected returns, emigration of educated workers tends to lower growth and welfare of those remaining. Thus, while the brain drain reduces welfare, the effects of labor market integration could nevertheless be positive. Emigration of low skilled workers also reduces growth via adverse effects on education. Higher tuition fees, common in transition countries, counteract positive growth effects of market determined wages.
18 pages, December 27, 2002
Full text files
Questions (including download problems) about the papers in this series should be directed to Sune Karlsson ()
Report other problems with accessing this service to Sune Karlsson ().
This page generated on 2018-01-23 23:31:54.