Migration: A theoretical comparison on countries’ welfare

Jaskold Gabszewicz, Jean;Zanaj, Skerdilajda
(2020) International Journal of Economic Theory — Vol. 16, n° 2, p. 167-183 (2020)

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Authors
  • Jaskold Gabszewicz, JeanUCLouvain
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  • Zanaj, Skerdilajda
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Abstract
We compare the effects of migration on the production of public goods, on income taxes, and on the welfare of residents in the sending and receiving countries. Migration is driven by income differences between countries. Alternative wage adjustment scenarios are considered: fully flexible wages, upward rigidity, and unemployment. We show that in all scenarios, emigration is detrimental to welfare for the origin country. Migration improves welfare for the destination country in the presence of flexible wages and upward rigidity, but it has detrimental effects in the presence of unemployment. © 2019 IAET
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Jaskold Gabszewicz, J., & Zanaj, S. (2020). Migration: A theoretical comparison on countries’ welfare. International Journal of Economic Theory, 16(2), 167-183. https://doi.org/10.1111/ijet.12238 (Original work published 2020)