Emigration and capital formation : the case of Greece

Abstract

The task of this paper is to estimate the loss in capital formation due to emigration. Dynamic aspects of emigration and repatriation have been left out. The premium placed on foreign exchange (due to Greece’s chronic balance-of-payments deficits) has also been left out. Traditional literature on Greek emigration has emphasized remittances only. This paper attempts to correct this shortcoming by showing that emigration gives rise not only to revenue but also to costs for Greece. Although we lack detailed data required to estimate the present value of remittances, the available data suggest that Greece would get more capital formation if the Greeks stayed home rather then emigrate.