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International Migration and International Trade

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  • Razin, A.
  • Sadka, E.

Abstract

This paper surveys key developments in the theory of international migration and international trade, and provides a few stylized facts. International migration, in many important cases, such as cross-country differences in productivity, can be a complement to international flows of commodities. In the presence of a productivity difference that is generated by an external economy effect of human, capital physical capital has weak incentives to flow from developed to underdeveloped countries while pressures for international migration from poor to rich countries are strong. The balancing factors underlying an efficient global dispersion of population are those which generate advantages to size, such as public goods, or increasing returns to scale on one hand, and those which generate disadvantages to size, such as immobile factors or congestion effects in the utilization of public services, on the other hand. The modem welfare state typically redistribute income from the rich to the poor in a way which attracts poor migrants from the less developed countries. Since migration could impose a toll on the redistribution policy of the Developed Country it may benefit from the extension of foreign aid to the Less Developed Country if this aid serves to finance a subsidy to workers in the Less Developed Country, thereby containing migration.

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Bibliographic Info

Paper provided by Tel Aviv - the Sackler Institute of Economic Studies in its series Papers with number 11-92.

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Length: 44 pages
Date of creation: 1992
Date of revision:
Handle: RePEc:fth:teavsa:11-92

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Postal: Tel-Aviv University, The Sackler Institute of Economic Studies, Ramat Aviv 69 978 Tel-Aviv, Israel
Phone: +972-3-640-9715
Fax: +972-3-640-9908
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Web page: http://econ.tau.ac.il/
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Keywords: international trade ; migration;

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