Diskussionspapier // Technische Universität Ilmenau, Institut für Volkswirtschaftslehre 41
The paper investigates the potential impact of foreigners on economic development. Historic examples, various contemporary empirical observations and theory support the working thesis that regions which face a high quota of foreign residents may benefit from human capital spillovers between different ethnic groups. It is argued that immigration brings about both a more effective division of labour and mutual learning and leads thereby to higher per-capita-income. We apply these findings to the current economic sickliness of East-Germany and conclude that in this region a more committed immigration policy may prove to be an particularly appropriate remedy.