Labour market characteristics and the burden of ageing : North America versus Europe

A transition from pay-as-you-go pension systems to more private funded systems is often suggested as a solution to finance pension systems threatened by ageing. This paper analyses alternative potential remedies linked to changes in labour market characteristics, within an international computable overlapping-generations model of the world economy. A prolongation of the working life of skilled or unskilled individuals, an increase in the demand of skills, a rise in the education levels and increased skilled or unskilled immigration have very different outcomes in North-America and in Europe. In the latter region, a postponement in the retirement age of unskilled individuals has the most beneficial effect in relieving the fiscal pressure on pensions systems, because the proportion of unskilled workers is relatively larger in Europe than in North-America. In North-America, where skilled labour is more abundant, an acceleration in skill-biased technical change has the biggest impact on pensions systems, as it raises the productivity of skilled workers.OLG-CGE Model, ageing, labour market, migration

Brain drain, remittances, and fertility model

How do high and low skilled migration affect fertility and human capital in migrants’ origin countries? This question is analyzed within an overlapping generations model where parents choose the number of high and low skilled children they would like to have. Individuals migrate with a certain probability and remit to their parents. It is shown that a brain drain induces parents to have more high and less low educated children. Under certain conditions fertility may either rise or decline due to a brain drain. Low skilled emigration leads to reversed results, while the overall impact on human capital of either type of migration remains ambiguous. Subsequently, the model is calibrated on a developing economy. It is found that increased high skilled emigration reduces fertility and fosters human capital accumulation, while low skilled emigration induces higher population growth and a lower level of education.Skilled emigration, remittances, fertility, human capital

Migration and human capital in an endogenous fertility model

How do high and low skilled migration affect fertility and human capital in migrants’ origin countries? This question is analyzed within an overlapping generations model where parents choose the number of high and low skilled children they would like to have. Individuals migrate with a certain probability and remit to their parents. It is shown that a brain drain induces parents to have more high and less low educated children. Under certain conditions fertility may either rise or decline due to a brain drain. Low skilled emigration leads to reversed results, while the overall impact on human capital of either type of migration remains ambiguous. Subsequently, the model is calibrated on a developing economy. It is found that increased high skilled emigration reduces fertility and fosters human capital accumulation, while low skilled emigration induces higher population growth and a lower level of education.migration, human capital, fertility

The Impact of Weather Anomalies on Migration in sub-Saharan Africa

This paper analyzes the effects of weather anomalies on migration in sub-Saharan Africa. Theoretically, we show how weather anomalies induce rural-urban migration that subsequently triggers international migration. We distinguish two transmission channels, an amenity and an economic geography channel. Empirically, based on annual, cross-country panel data for sub-Saharan Africa, our results suggest that weather anomalies increased internal and international migration through both channels. We estimate that temperature and rainfall anomalies caused a total displacement of 5 million people in net terms during the period 1960-2000, i.e. a minimum of 130’000 people every year. Further weather anomalies, based on IPCC projections on climate change, could lead to an additional annual displacement of 11 million people by the end of the 21st century.International migration, urbanization, rural-urban migration, weather anomalies, sub-Saharan Africa.

Demography, capital flows and unemployment

This paper contributes to the already vast literature on demography-induced international capital flows by examining the role of labor market imperfections and institutions. We setup a two-country overlapping generations model with search unemployment, which we calibrate on EU15 and US data. Labor market imperfections are found to significantly increase the volume of capital flows, because of stronger employment adjustments in comparison with a competitive economy. We next exploit themodel to investigate how demographic asymmetriesmay have contributed to unemployment and welfare changes in the recent past (1950-2010). We show that a policy reform in one country also has an impact on labor markets in other countries when capital is mobile.demographics; capital flows; overlapping generations; general equilibrium; unemployment

Brain drain in globalization A general equilibrium analysis from the sending countries’ perspective

The paper assesses the global effects of brain drain on developing economies and quantifies the relative sizes of various static and dynamic impacts. By constructing a unified generic framework characterized by overlapping generations dynamics and calibrated to real data, this study incorporates many direct impacts of brain drain whose interactions, along with other indirect effects, are endogenously and dynamically generated. Our findings suggest that the short-run impact of brain drain on resident human capital is extremely crucial, as it does not only determine the number of skilled workers available to domestic production, but it also affects the sending economy’s capacity to innovate or to adopt modern technologies. The latter impact plays an important role particularly in a globalized economy where capital investments are made in places with higher production efficiencies ceteris paribus. Hence, in spite of several empirically documented positive feedback effects, those countries with high skilled emigration rates are the most candid victims to brain drain since they are least likely to benefit from the “brain gain” effect, and thus suffering from declines of their resident human capital.Brain Drain, Capital Flow, Development, Human Capital, Remittances

On the world economy and international migration.

This thesis aims at exploring different economic implications of international migration. Its first chapter is devoted to the description of a calibrated model of the world economy, which shows the importance of taking into account international capital mobility between world regions. In a context of global aging, demographic differences among regions could result in increased trade trough international capital movements that might improve economic outcomes compared to a situation of financial autarky. This chapter sets a path for a migration analysis within a world model. The second chapter investigates the impact of immigration on the sustainability of pension systems in North-America and Western Europe. It is found that increased immigration yields only small fiscal gains and that both a selective, with a majority of high-skilled immigrants, and a non-selective immigration policy, with a majority of low-skilled immigrants, induce similar tax cuts. The third chapter assesses the implications of various direct and indirect effects of high-skilled emigration on migrants' sending regions. It reconfirms the important role of remittances in raising the income of those left behind. Moreover, a high-skilled diaspora may greatly benefit domestic production by reducing information-related risks and bringing in more foreign direct investments, while the so-called ``brain gain" effect acts to reduce the income disparity between workers of different skills. Chapter four analyzes the link between climate change and international migration. A two-country model with endogenous climate change is employed, in which the production in the North generates climate change which negatively affects the productivity of the South. The main findings are that climate change will increase migration and that small impacts of climate change have significant impacts on the number of migrants. Finally, chapter five studies how high- and low- skilled migration affect fertility and human capital in migrants' origin countries. It is found that, within a theoretical model, a brain drain induces parents to have more high- and less low-educated children. Under specific conditions, fertility may either rise or decline due to a brain drain.Cette thèse vise à explorer plusieurs implications économiques de la migration internationale. Le premier chapitre est consacré à la description d’un modèle calibré sur l’économie mondiale, qui montre l’importance de la prise en compte de la mobilité internationale du capital entre les différentes régions du monde. Dans un monde en vieillissement, les disparités démographiques entre régions pourraient conduire à un accroissement des échanges à travers des mouvements internationaux de capitaux qui amélioreraient les performances économiques par rapport à une situation d’autarcie financière. Ce chapitre ouvre la voie à une analyse de la migration dans le cadre d’un modèle mondial. Le deuxième chapitre examine l’impact de l’immigration sur la viabilité des systèmes de pension en Amérique du Nord et en Europe de l’Ouest. Les résultats suggèrent qu’une immigration accrue apporte des gains fiscaux minimaux et que des politiques d’immigration sélective, avec une majorité d’immigrés qualifiés, et non-sélective, avec une majorité d’immigrés peu-qualifiés, entrainent des réductions fiscales similaires. Le troisième chapitre évalue les implications de divers effets directs et indirects de l’émigration qualifiée sur les pays d’origine des migrants. Elle reconfirme l’importance du rôle des transferts de fonds dans l’accroissement du revenu de la population restée au pays. De plus, la diaspora qualifiée peut être considérablement bénéfique pour la production domestique à travers la diminution des risques liés à l’information et en favorisant les investissements directs étrangers, tandis que l’effet de ``brain gain’’ a un impact réducteur sur l’inégalité des revenus entre travailleurs de qualifications différentes. Le quatrième chapitre étudie la relation entre changement climatique et migration internationale. L’analyse est effectuée dans un modèle à deux pays avec changement climatique endogène, où la production du Nord génère un changement climatique qui affecte négativement la productivité au Sud. Les résultats principaux sont que le changement climatique augmente la migration et que des changements climatiques minimes peuvent avoir des impacts importants sur le nombre de migrants. Finalement, le cinquième chapitre étudie comment la migration de travailleurs qualifiés et peu-qualifiés affecte la fertilité et le capital humain dans les pays d’origine des migrants. Les résultats, obtenus dans le cadre d’un modèle théorique, suggèrent qu’une augmentation des opportunités de migration des travailleurs qualifiés amène les parents à financer l’éducation à un plus grand nombre de leurs enfants. Sous certaines conditions, la fertilité peut soit augmenter ou diminuer.

La Chine s’éveille, l’Europe tremble

Ce numéro de Regards économiques étudie les conséquences pour l’Europe d’une émergence économique de la Chine. Les résultats suggèrent que la croissance chinoise réduit la consommation en Europe à court/moyen terme, mais l’augmente à plus long terme. De plus, les effets sur la consommation sont différents pour les travailleurs et les retraités.

Demography, Capital Flows and Unemployment

This paper contributes to the already vast literature on demography-induced international capital flows by examining the role of labor market imperfections and institutions. We setup a two-country overlapping generations model with search unemployment, which we calibrate on EU15 and US data. Labor market imperfections are found to significantly increase the volume of capital flows, because of stronger employment adjustments in comparison with a competitive economy. We next exploit the model to investigate how demographic asymmetries may have contributed to unemployment and welfare changes in the recent past (1950-2010). We show that a policy reform in one country also has an impact on labor markets in other countries when capital is mobile.demographics, capital flows, overlapping generations, general equilibrium, unemployment

Brain Drain in Globalization: A General Equilibrium Analysis from the Sending Countries' Perspective

The paper assesses the global effects of brain drain on developing economies and quantifies the relative sizes of various static and dynamic impacts. By constructing a unified generic framework characterized by overlapping-generations dynamics and calibrated to real data, this study incorporates many direct impacts of brain drain whose interactions, along with other indirect effects, are endogenously and dynamically generated. Our findings suggest that the short-run impact of brain drain on resident human capital is extremely crucial, as it does not only determine the number of skilled workers available to domestic production, but it also affects the sending economy's capacity to innovate or to adopt modern technologies. The latter impact plays an important role particularly in a globalized economy where capital investments are made in places with higher production efficiencies ceteris paribus. Hence, in spite of several empirically documented positive feedback effects, those countries with high skilled emigration rates are the most candid victims to brain drain since they are least likely to benefit from the "brain gain" effect, and thus suffering from declines of their resident human capital.brain drain, capital flow, development, human capital, remittances