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How many cake-eaters? Chouette, on a du monde a diner !

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  • Favard, Pascal
  • Karp, Larry

Abstract

We use a cake-eating model with a non-renewable resource and a backstop technology to describe the effect of migration of poor workers into a rich country with surplus labor. Migrants receive a large transfer from natives. If future migration is anticipated, natives' flow of utility increases discontinuously at the time of migration. Migration at time 0 may cause the~ initial flow of natives~ utility to be higher. However, the present discounted value of the stream of per capita utility falls. Thus, when migration occurs, it may benefit the current generation of natives, although it harms other generations.
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Suggested Citation

  • Favard, Pascal & Karp, Larry, 2004. "How many cake-eaters? Chouette, on a du monde a diner !," Journal of Economic Dynamics and Control, Elsevier, vol. 28(4), pages 801-815, January.
  • Handle: RePEc:eee:dyncon:v:28:y:2004:i:4:p:801-815
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    6. Michael R. Caputo, 1990. "Comparative Dynamics via Envelope Methods in Variational Calculus," Review of Economic Studies, Oxford University Press, vol. 57(4), pages 689-697.
    7. Bond, Eric W. & Chen, Tain-Jy, 1987. "The welfare effects of illegal immigration," Journal of International Economics, Elsevier, vol. 23(3-4), pages 315-328, November.
    8. Kemp, Murray C & Long, Ngo Van, 1980. "On Two Folk Theorems Concerning the Extraction of Exhaustible Resources," Econometrica, Econometric Society, vol. 48(3), pages 663-673, April.
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