Dynamic Modeling of Labor Migration Impact on the Economic System Development

Abstract

In this paper we present a model description of the impact of labor migration on the development of economic systems in countries of migration attraction. It should be emphasized that labor migration is one of the major factors in the development of the labor market. The inflow of migrants into a region should correspond to the labor resources demand of the labor market. To estimate and predict the migration flows between countries with different level of socio-economic development we elaborated a dynamic multi-factor model, which is based on the assumptions of the positional games theory and allows to predict the behavior of each individual, depending on economic factors. According to the model idea, potential migrants have the information on the difference of living and working conditions in both countries of origin and migration attraction. This model takes into account several economic theories of migration and describes the migrant’s behavior in terms of migration barriers absence. At the final step of modeling we provide an assessment of migration impact on the development of socio-economic systems in the countries of migration attraction using an approach, which is based on a production function of Cobb-Douglas type.