International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Skill Composition of Migrants and Economic Growth in Developing Economies
Abeba Mussa

A significant number of both skilled and unskilled workers had been flowing from developing countries to developed economies searching for a better life. A lose of any type of labor, whether skilled or not, reduce the total available labor resource, and thus have adverse effect on growth of the economy. The migration of skilled labor could also have a positive feedback effect on the growth of home country. The net effect, therefore, will depends on whether the positive feedback effect outweighs the reduction of labor resource in the home country. This paper examines the impact of migration, based on education level of immigrants, on economic growth of the sending countries. Using unbalanced panel data of 114 countries for the period 1975 - 2000, the paper supports the hypothesis that the outflows of skilled labor have a positive feedback effect on developing countries. However, outflow of skilled workers would significantly hurt the growth of the very poor economies, which experienced high income inequality.

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