Migration as a source of growth: The perspective of a developing country

Abstract.

This paper analyses the dynamics of migratory flows and growth in a developing economy. We show that when workers freely choose their location, some natives can rationally decide to return to their home country after they have accumulated a certain amount of knowledge abroad, while some prefer to stay permanently in the same economy (either at home or abroad). We point out that worker mobility can have an expansionary effect on the developing economy. Moreover, we show that in the long-run, as the sending economy develops, fewer natives are likely to emigrate and more migrants are likely to return.