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Migrant Labor, Unemployment and Optimal Growth

Listed author(s):
  • Ioana Viasu

    ()

    (Faculty of Economics and Business Administration, West University of Timisoara, Romania)

One of the arguments against migrant labor is that it has negative ef- fect on the employment of domestic labor. The question is now if the immigration has also negative effects on the other variables of the econ- omy. To examine these effects we develop an optimal growth model with migration and unemployment and then we analyze these effects, restricting our analysis to the steady state. We introduce a simplify- ing hypothesis concerning the skill level of human capital. We assume that the average skill level of domestic employed labor differs from the average skill level of migrant labor, but the two kinds of labor grow at the same constant rate. We prove that the immigration process could have both positive and negative effects on consumption, human capital and physical capital, depending on the skill level of the migrant labor. The numerical simulations confirm our theoretical results.

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File URL: http://cmss.univnt.ro/wp-content/uploads/vol/split/vol_II_issue_2/CMSS_vol_II_issue_2_art.004.pdf
File Function: First version, 2014
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Article provided by "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences in its journal Computational Methods in Social Sciences (CMSS).

Volume (Year): 2 (2014)
Issue (Month): 2 (December)
Pages: 30-38

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Handle: RePEc:ntu:ntcmss:vol2-iss2-14-030
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  1. Hazari, Bharat R. & Sgro, Pasquale M., 2003. "The simple analytics of optimal growth with illegal migrants," Journal of Economic Dynamics and Control, Elsevier, vol. 28(1), pages 141-151, October.
  2. Christian Dustmann & Albrecht Glitz & Tommaso Frattini, 2008. "The labour market impact of immigration," Oxford Review of Economic Policy, Oxford University Press, vol. 24(3), pages 478-495, Autumn.
  3. Moy, Hon Man & Yip, Chong K., 2006. "The simple analytics of optimal growth with illegal migrants: A clarification," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2469-2475, December.
  4. Joshua D. Angrist & Adriana D. Kugler, 2003. "Protective or counter-productive? labour market institutions and the effect of immigration on eu natives," Economic Journal, Royal Economic Society, vol. 113(488), pages 302-331, 06.
  5. Theodore Palivos, 2009. "Welfare effects of illegal immigration," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(1), pages 131-144, January.
  6. Gianmarco I. P. Ottaviano & Giovanni Peri, 2012. "Rethinking The Effect Of Immigration On Wages," Journal of the European Economic Association, European Economic Association, vol. 10(1), pages 152-197, 02.
  7. Fan, C. Simon & Stark, Oded, 2008. "Rural-to-urban migration, human capital, and agglomeration," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 234-247, October.
  8. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
  9. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1335-1374.
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