Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/30147 
Year of Publication: 
2009
Series/Report no.: 
MAGKS Joint Discussion Paper Series in Economics No. 2009,42
Publisher: 
Philipps-University Marburg, Faculty of Business Administration and Economics, Marburg
Abstract: 
In this paper we investigate the twofold effect of demographics on international factor flows in a model with endogenous policy constraints on both foreign direct investment and migration. Factor price differences between industrialized and developing countries create economic incentives for migration to developed countries and for capital flows to less developed countries. However, political barriers to immigration in developed countries and expropriation risks in developing countries impede labor and capital flows. Using a political economy approach that takes into account different generations’ conflicting attitudes towards immigration and expropriation, we explore how these policy restrictions interact. We find that, in the presence of mobility constraints, larger demographic differences between countries need not result in an increase of factor flows.
Subjects: 
Demographic Change
Political Economy
Migration
Foreign Direct Investment
JEL: 
D78
F21
F22
J10
Document Type: 
Working Paper

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