Question

1.Why does human capital flow from poor to rich countries and not the other way around? Hint: chapter 4 of Easterly (2002) addresses this paradox.

2.Do you think migration is a good way to reduce poverty and share prosperity? How or why?

Answer 1

Answer 2: Migration is a good way to reduce poverty and share prosperity. These are the twin aim of world Bank. Acc to world bank, migrants income will increase 3 to 6th times when they migrate poor to rich country . If there will be increment in  labour force which will increase the profit/gain for the migrants and overall profit for the destination country.

Answer 1:

Human capital flow from poor ro rich countries because poor countries generally have current account surplus while rich countries have current account deficit. Captil gain gives the economic sense to saving factors because  Poor countries have the high saving rate and rich countries have low saving rate. Poor countries have high capital to output ratio that's why capital flow from poor country to rich country which have low capital to output ratio.