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An Equilibrium Model of Guest-Worker Migration

Author

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  • Djajic, Slobodan
  • Milbourne, Ross

Abstract

This paper examines the problem of guest-worker migration from an economy populated by identical, utility-maximizing individuals with finite working lives. The decision to migrate, the rate of saving while abroad, as well as the length of a migrant's stay in the foreign country, are all viewed as part of a solution to an intertemporal optimization problem. In addition to studying the microeconomic aspects of temporary migration, the paper analyses the determinants of the equilibrium flow of migrants, the corresponding domestic wage, and the level of welfare enjoyed by a typical worker. Effects of an emigration tax are also investigated.

Suggested Citation

  • Djajic, Slobodan & Milbourne, Ross, 1985. "An Equilibrium Model of Guest-Worker Migration," Queen's Institute for Economic Research Discussion Papers 275203, Queen's University - Department of Economics.
    • Handle: RePEc:ags:queddp:275203
    DOI: 10.22004/ag.econ.275203
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    File URL: https://ageconsearch.umn.edu/record/275203/files/QUEENS-IER-PAPER-613.pdf
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    References listed on IDEAS

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    1. McCulloch, Rachel & Yellen, Janet L., 1975. "Consequences of a tax on the brain drain for unemployment and income inequality in less developed countries," Journal of Development Economics, Elsevier, vol. 2(3), pages 249-264, September.
    2. Bhagwati, Jagdish N. & Hamada, Koichi, 1982. "Tax policy in the presence of emigration," Journal of Public Economics, Elsevier, vol. 18(3), pages 291-317, August.
    3. Baumol, William J., 1982. "The income distribution frontier and taxation of migrants," Journal of Public Economics, Elsevier, vol. 18(3), pages 343-361, August.
    4. Bhagwati, Jagdish N. & Schatz, Klaus-Werner & Wong, Kar-yiu, 1984. "The West German gastarbeiter system of immigration," European Economic Review, Elsevier, vol. 26(3), pages 277-294, December.
    5. Rudolph C. Blitz, 1977. "A Benefit‐Cost Analysis Of Foreign Workers In West‐Germany, 1957–1973," Kyklos, Wiley Blackwell, vol. 30(3), pages 479-502, August.
    6. Krauss, Melvyn B, 1976. " The Economics of the "Guest Worker" Problem: A Neo Heckscher-Ohlin Approach," Scandinavian Journal of Economics, Wiley Blackwell, vol. 78(3), pages 470-476.
    7. Slobodan Djajic, 1984. "International Migration, Remittances and Welfare in a Dependent Economy," Working Paper 578, Economics Department, Queen's University.
    8. Richards, Alan & Martin, Philip L, 1983. "The Laissez-Faire Approach to International Labor Migration: The Case of the Arab Middle East," Economic Development and Cultural Change, University of Chicago Press, vol. 31(3), pages 455-474, April.
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    Cited by:

    1. P. Giannoccolo, 2004. "The Brain Drain. A Survey of the Literature," Working Papers 526, Dipartimento Scienze Economiche, Universita' di Bologna.

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