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Migration: A theoretical comparison on countries’ welfare

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  • Jean Gabszewicz
  • Skerdilajda Zanaj

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.

Suggested Citation

  • Jean Gabszewicz & Skerdilajda Zanaj, 2020. "Migration: A theoretical comparison on countries’ welfare," International Journal of Economic Theory, The International Society for Economic Theory, vol. 16(2), pages 167-183, June.
    • Handle: RePEc:bla:ijethy:v:16:y:2020:i:2:p:167-183
    DOI: 10.1111/ijet.12238
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H4 - Public Economics - - Publicly Provided Goods

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