Impact of skilled labour migration on energy, environment and economic growth in home and host countries: A computable general equilibrium analysis

Abstract

Migration of both skilled labour force can alter economic conditions and environmental sustainability of both host and home countries. Therefore, this study aims to explore the effect of skilled labour force migration on economic growth, energy demand and environmental sustainability of home and host countries. This objective is realised by constructing a multiregional computable general equilibrium model for developed and developing countries. Furthermore, developing countries are subcategorized into four groups such as high income, upper middle‐income, lower middle‐income and low‐income countries. The results of policy simulations indicate that skilled labour migration can reduce the gross domestic product, welfare, energy consumption and carbon emissions in home countries, and the reverse is true for the host countries. Whereas the inflow of remittances to home counties can enhance their economic growth, energy consumption, and CO2 emissions, while reverse trend of remittances outflow is observed in host countries. Similarly, reverse migration can increase economic increase in developing countries along with increasing energy demand and carbon emissions. The study urges for developed countries for utilise skilled immigrants in environment friendly manufacturing industries.