Question

Explain the potential effects on the economic growth rate from a substantial increase in the number of skilled people of working age entering a country. use graphs

Answer 1

The relationship between population growth and the growth of economic output has been studied extensively. Population growth affects many phenomena such as the age structure of a country’s population, international migration, economic inequality, and the size of a country’s workforce. These factors both affect and are affected by overall economic growth.

Skilled migration has positive effects on economic growth

The empirical literature on immigration and economic growth clearly indicates positive effects from immigration. However, because of the aggregated level of analysis in these studies they reveal little about the underlying mechanisms by which growth effects operate. Some evidence indicates that more highly educated immigrants contribute significantly more to economic growth. Immigration’s effects on growth in Sweden are estimated to have been higher than in many other OECD countries during the period 1986–2006, due to high education levels among immigrants. Although the reported education level of immigrants has remained high, in recent years a much larger share of the total number of immigrants has had an unknown or unreported education level. This contributes to uncertainty concerning the extent of future growth effects.