The paradox of plenty and migration patterns of resource rich countries

Didier Adjakidje, Université de Montréal

In this paper, I provide a theory explaining how the resource windfall of some developing economies impact their patterns of international migration. My modelled economy is less technologically advanced than the rest of the world but has the advantage of being abundant in natural resources. At the end of their childhood, agents face the dilemma of staying in their homeland or migrating to the more developed rest of the world. On early dates, the resource bonanza generates enough wealth effects and keeps the wages high enough so that nationals have no incentives to migrate abroad. Later however, the depletion of the resource pushes out the migration flows with increasing incentives to leave the domestic economy. These theoretical results are validated using a gravity model of migration.