Guest-worker Migration, Human Capital and Fertility


  • The author thanks an anonymous referee for helpful comments and suggestions. The author also thanks participants at the CESifo area conference on the global economy (Munich 2011), Second Workshop on “Economics of the Mediterranean and the Euromediterranean Process” (Barcelona 2011) and DEGIT-XVI (St. Petersburg 2011) for their comments.

Azarnert: Department of Economics, Bar Ilan University, Ramat Gan, 52900, Israel and CESifo, Munich, Germany. Tel: +972-3-5317534; Fax: +972-3-7384034; E-mail:


This work focuses on a temporary guest-worker-type migration of individuals from the middle class of the wealth distribution. The article demonstrates that the possibility of a low-skilled guest-worker employment in a higher wage foreign country lowers the relative attractiveness of the skilled employment in the home country. Thus, it prevents a fraction of individuals from acquiring human capital. Therefore, even if all individuals who acquired education remain in the home country, the actual number of educated workers in the source economy decreases, and the aggregate level of human capital in this economy would thus be negatively affected.