Equipping Immigrants: Migration Flows and Capital Movements

28 Pages Posted: 26 Apr 2007

See all articles by Fabian Lange

Fabian Lange

Yale University - Department of Economics; IZA Institute of Labor Economics

Douglas Gollin

Oxford Department of International Development; Williams College; Yale University

Date Written: April 2007

Abstract

Both policy makers and researchers have devoted considerable attention in recent years to the large current account and capital account imbalances among OECD countries. In particular, the size of the United States current account deficit has attracted intense attention and spawned numerous explanations. There are undoubtedly many reasons for this deficit, including government fiscal policy imbalances, but one explanation that has not previously received much attention is that current account deficits and the matching capital inflows are responses to international flows of labor. Migrants must be equipped with machines, and the resulting demands for capital are likely, all else being equal, to generate cross-border flows of capital. This paper explores the extent to which migration-related capital flows can explain the movements and magnitudes of current and capital account imbalances in OECD countries.

Keywords: migration, capital flows

JEL Classification: F21, F22

Suggested Citation

Lange, Fabian and Gollin, Douglas, Equipping Immigrants: Migration Flows and Capital Movements (April 2007). IZA Discussion Paper No. 2745, Available at SSRN: https://ssrn.com/abstract=982597

Fabian Lange (Contact Author)

Yale University - Department of Economics ( email )

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IZA Institute of Labor Economics

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Douglas Gollin

Oxford Department of International Development ( email )

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Williams College ( email )

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Williamstown, MA 01267
United States

Yale University ( email )

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United States

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