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GTAP Resource #4367

"Endogenous determination of migration flows between Africa and European Union by interlinking demographic dynamics and labor market liberalization in a modified version of the GTAP model"
by Standardi, Gabriele

This work aims at shedding some light on the combined effects of labor market liberalization and demographic patterns across Africa and Europe. The reference framework is a modified version of the GTAP model, where unskilled labor, skilled labor and capital can move within the Africa-EU macro-region.
The focus is on the analysis of migration. In the standard GTAP model factor endowments are geographically immobile. We model an integrated Africa-EU market for labor and capital by using CET (Constant Elasticity of Transformation) functions. These equations determine endogenously the migration flows through the skilled and unskilled labor supply. In addition the general equilibrium model allows assessing the economic consequences on GDP and inequality by looking at the movement of the factor prices (capital, skilled labor and unskilled labor). In general if capital price increases and labor price decreases inequality increases; if capital price decreases and labor price increases inequality decreases.
Basically we have three scenarios. In the first one it is assumed only an integrated capital market between Africa and EU. This is the benchmark scenario. In the second scenario the liberalization process involves not only the capital market but also the skilled labor market. Finally in the third scenario a full liberalization takes place in the capital, skilled and unskilled labor market.
In each scenario two types of demographic exogenous shock are simulated. The first one is the short run impact on population and covers the period 2015-2020. The second one is the long run impact and refers to the period 2015-2050.
According to the United Nations projections, population in Africa is expected to grow by about 12.5% and 105.2% in the period 2015-2020 and 2015-2050, respectively. On the contrary, population in Europe will not grow in the period 2015-2020 and will decrease by about 4.6% in the period 2015-2050. These are our exogenous drivers.
In order to distingu...

Resource Details (Export Citation) GTAP Keywords
Category: 2014 Conference Paper
Status: Published
By/In: Presented at the 17th Annual Conference on Global Economic Analysis, Dakar, Senegal
Date: 2014
Created: Standardi, G. (4/8/2014)
Updated: Standardi, G. (4/8/2014)
Visits: 2,867
- Model validation and sensitivity analysis
- Demographics
- Economic growth
- Migration
- Africa (Central)
- Africa (East)
- Africa (North)
- Africa (Southern)
- Africa (West)
- European Union

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