Human Capital Accumulation, Social Mobility and Migrations

Abstract

This paper studies the effects of migrations on growth and income distribution when social mobility is imperfect. Workers migrate in response to differences in expected wages between home and a foreign country, but their choice depends also whether they qualified themselves as skilled workers by accumulating human capital or not. Such an activity has a cost, which depends on each agent’s family background: sons of skilled workers have lower human capital accumulation costs. The effects of labour migrations on per capita income depend only on the degree of social mobility: if there is a difference in the cost of accumulating human capital for the sons of educated and non‐educated people, migrations reduce total earnings of unskilled workers in the receiving country, and increase those of skilled workers.