INTERNATIONAL MIGRATION, HUMAN CAPITAL COMPOSITION and MIDDLE-INCOME TRAPS

Zhaobin Fan; H. U.I. Li

doi:10.1142/S0217590817450060

INTERNATIONAL MIGRATION, HUMAN CAPITAL COMPOSITION and MIDDLE-INCOME TRAPS

Zhaobin Fan^*, H. U.I. Li

^*Corresponding author for this work

Mathematics

Research output: Contribution to journal › Article › peer-review

Abstract

One of the most interesting and debateable topics in China's economic growth is whether China's economy would be hindered by a middle-income trap. This paper addresses this topic by analyzing the link between international skilled migration and the middle-income trap. Our study has extended the model proposed by [De la Croix, D. and Docquier F. (2012). Do Brain Drain and Poverty Result from Coordination Failures? Journal of Economic Growth, 17(1) 1-26.] and accounted for the importance of heterogeneity of human capital emphasized by [Jones, F. (2008). The Knowledge Trap: Human Capital and Development Reconsidered. NBER Working Paper No. 14138, Northwestern University.] Results have demonstrated that in the presence of externalities in the formation of human capital, there possibly exist four steady-state development paths in the dynamic system due to coordination failures. These four paths include: (i) the unskilled labor equilibrium which is characterized by low-income and significant loss of skilled labor, (ii) the generalist equilibrium with lower-middle income and significant loss of specialists, (iii) the specialist equilibrium with the characteristics of upper-middle income and significant loss of generalists; and (iv) the skilled equilibrium with high income and insignificant loss of skilled workers. Amongst them, the generalist equilibrium and specialist equilibrium represent two types of middle-income trap.

Original language	English
Pages (from-to)	883-897
Number of pages	15
Journal	Singapore Economic Review
Volume	64
Issue number	4
DOIs	https://doi.org/10.1142/S0217590817450060
Publication status	Published - 1 Sept 2019

Bibliographical note

Funding Information:
The authors acknowledge support from "The National Social Science Fund of China (No. 13BRK013)", and "The Fundamental Research Funds for the Central Universities (No. 15jnlh007)". The authors are grateful to two reviewers for very helpful comments and suggestions. All remaining errors are the sole responsibility of the authors.

Funding Information:
The authors acknowledge support from “The National Social Science Fund of China (No. 13BRK013)”, and “The Fundamental Research Funds for the Central Universities

Publisher Copyright:
© 2019 World Scientific Publishing Company.

Keywords

Brain drain
human capital
middle-income trap
multiple equilibria

ASJC Scopus subject areas

Economics and Econometrics

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1142/S0217590817450060

Cite this

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title = "INTERNATIONAL MIGRATION, HUMAN CAPITAL COMPOSITION and MIDDLE-INCOME TRAPS",

abstract = "One of the most interesting and debateable topics in China's economic growth is whether China's economy would be hindered by a middle-income trap. This paper addresses this topic by analyzing the link between international skilled migration and the middle-income trap. Our study has extended the model proposed by [De la Croix, D. and Docquier F. (2012). Do Brain Drain and Poverty Result from Coordination Failures? Journal of Economic Growth, 17(1) 1-26.] and accounted for the importance of heterogeneity of human capital emphasized by [Jones, F. (2008). The Knowledge Trap: Human Capital and Development Reconsidered. NBER Working Paper No. 14138, Northwestern University.] Results have demonstrated that in the presence of externalities in the formation of human capital, there possibly exist four steady-state development paths in the dynamic system due to coordination failures. These four paths include: (i) the unskilled labor equilibrium which is characterized by low-income and significant loss of skilled labor, (ii) the generalist equilibrium with lower-middle income and significant loss of specialists, (iii) the specialist equilibrium with the characteristics of upper-middle income and significant loss of generalists; and (iv) the skilled equilibrium with high income and insignificant loss of skilled workers. Amongst them, the generalist equilibrium and specialist equilibrium represent two types of middle-income trap.",

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author = "Zhaobin Fan and Li, {H. U.I.}",

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INTERNATIONAL MIGRATION, HUMAN CAPITAL COMPOSITION and MIDDLE-INCOME TRAPS

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

UN SDGs

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