The Economics of International Migration: A Simulation Study

Abstract

<p>This dissertation develops a simulation model for exploring the implications of the integration of economic activity and demographic behaviour and for evaluating the consequences of changes in population variables in different economic and demographic situations. A two country macro-model is specified using different assumptions regarding the conditions of the two nations. The effects of given population changes, especially the fertility and migration propensities, in one country on the demographic and macroeconomic variables in both countries are given emphasis in the analysis.</p> <p>The analysis is built around a simulation model that uses actual demographic data to create two hypothetical countries having economic and demographic relations. The model then conducts experiments with these two countries by tracing the effects of specific changes in the economic and demographic variables on the overall economic and demographic characteristics of each country over time. In this way, the model provides valuable insights into the patterns of economic-demographic relationships as well as the construction of economic-demographic models for particular countries.</p> <p>The study is conducted in two parts. The first part consists of a survey of recent developments in trade theory and experience with economic-demographic modelling, and outlines the theoretical approach to the construction of the dynamic economic-demographic model to be used in the second part of the study. The second part then employs the model in the analysis of the effects of changes in population and economic variables on the two-country trading system.</p> <p>The basic results of the analysis provide insights regarding the effects of changes in fertility-rates, international migration propensities, production patterns, factor-endowments, the distributions of labour skills, and several other characteristics on such variables as per-capita income, the supplies of labour and capital, the total population, wage rates, imports and exports, and net migration rates, as well as the differences in the behaviour of these variables between the two countries over long periods of time.</p>