Long-Run Migration Incentives and Migration Effects: The Case of Different Fertility Rates / Langfristige Migrationsanreize und Migrationswirkungen: Der Fall unterschiedlicher Fertilitätsraten

Summary In this paper the direction of the long-run migration incentive in the presence of closed borders and the long-run welfare effects of a regime change from “autarky” to “free permanent migration” are studied. A difference in birth-country specific fertility rates is treated as the final cause for the creation of migration incentives in a two-country model where the standard overlapping-generations framework is used. The results concerning both the migration incentives and the consequences of migration are driven by a Golden Rule effect, such that a shift in the stationary capital-labour ratio towards the relevant Golden Rule capital-labour ratio is beneficial for the individuals. Opening the borders for permanent migration can always lead to the equalization of labour force growth rates. A continuum of such equilibria with migration does exist, but the application of the concept of migration-stability, introduced in this paper, gives reason to the suspicion that free migration can also lead to a collapse of the emigration country’s economy.