Business Intelligence

Guest-Worker Migration, Human Capital And Fertility

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Executive Summary

This paper focuses on a temporary guest-worker-type migration of individuals from the middle class of the wealth distribution. The paper demonstrates that the possibility of a low-skilled guest-worker employment in a higher wage foreign country lowers the relative attractiveness of the skilled employment in the home country. Thus it prevents a fraction of individuals from acquiring human capital. Therefore, even if all individuals who acquired education remain in the home country, the actual number of educated workers in the source economy decreases, and the aggregate level of human capital in this economy would thus be negatively affected.

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