Immigration, Human Capital Formation, and Endogenous Economic Growth

Abstract

Census data from international sources covering 77 percent of the world's migrant population indicate that the skill composition of migrants in major destination countries, including the United States, has been rising over the last four decades. Moreover, the population share of skilled migrants has been approaching or exceeding that of skilled natives. We offer theoretical propositions and empirical tests consistent with these trends via a general equilibrium model of endogenous growth in which human capital, population, income growth and distribution, and migration trends are endogenous. We derive new insights about the impact of migration on long-term income growth and distribution and the net benefits to natives in both destination and source countries.