Economic migration, capital flows, and welfare

This research project funded through the Systems Analysis Forum (SAF) aims to better understand the interaction between labour flows and capital flows in an economy. This work will help to improve the assessment of welfare dynamics and evaluate policies that can lead to higher levels of economic welfare. 

© doom.ko

© doom.ko

Both demographic changes and capital flows affect economic welfare, but in the literature one of these factors is typically immobile. In the context of economic integration, the mobility of the factors of production is equally important, and therefore, there is a clear need to develop a theoretical framework that integrates both dynamic effects.

 In this project, we develop a multilayer network model that captures the dynamics of labour and capital over regions, countries, or larger economic areas. Due to differences in wages and capital interest rates, certain countries attract labor and foreign investment. The proposed analytical model will be integrated in a dynamic optimization framework to study the policies that can lead to optimal welfare. The framework also allows to analyze the sensitivity of labour market and capital market policies with respect to other effects that drive labour and capital dynamics, such as population growth and saving rates.

Print this page

Last edited: 26 June 2017


Matthias Wildemeersch

Research Scholar

Exploratory Modeling Of Human-Natural Systems Research Group

T +43(0) 2236 807 359


Elena Rovenskaya

Program Director

Advancing Systems Analysis Program

T +43(0) 2236 807 608


Alexia Fürnkranz-Prskawetz

Research Scholar

Social Cohesion


and Wellbeing Research Group

T +43(0) 2236 807 289


Jesus Crespo Cuaresma

Research Scholar

Migration and Sustainable Development Research Group

T +43(0) 2236 807 513


June 2016 - June 2017

International Institute for Applied Systems Analysis (IIASA)
Schlossplatz 1, A-2361 Laxenburg, Austria
Phone: (+43 2236) 807 0 Fax:(+43 2236) 71 313