Labor migration and trade patterns in the presence of age composition differences across countries: an overlapping generations analysis

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Author
Uyar, Ali Emre
Advisor
Sayan, Serdar
Date
2000Publisher
Bilkent University
Language
English
Type
Thesis
Metadata
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http://hdl.handle.net/11693/18214Abstract
This study examines various effects of population growth differentials across
countries by using a two country overlapping generations (OLG) general equilibrium
model and shows that the resulting differences in age composition of populations
provide not only a basis for trade but also incentives for international migration of
labor. The analysis starts by considering autarky equilibria of the countries that are
assumed to be identical except for population growth rates initially, and shows that
the country with the lower (higher) population growth rate will have higher (lower)
capital per worker, wage rate and lifetime utility at all times. The cases of free trade
and international mobility of labor are then simulated for a comparative
investigation.
The simulations with the considered migration scheme reveal that the steady
state value of migration rate equalizes the post-migration population growth rates in
both coimtries. When trade is also taken into consideration, the results indicate that
the country that is attractive to the migrants would prefer trade to migration, if it is a
large country relative to the other. If both countries are equal in size, on the other
hand, trade turns out to be Pareto-inferior to migration for the host country, with
autarky being Pareto-superior to both trade and migration.