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Returns to Scale and the Economic Impact of Migration


  • Robert Rowthorn


Abstract This paper is concerned with the impact of international migration on a regional economy. It is based on the assumption that immigration causes the population of the region to grow, thereby increasing the cost of living for existing residents. In one version of the model, the government responds by increasing wages in the public sector so as to help offset the higher cost of living. The private sector follows suit. In another version of the model, wages are determined by supply and demand. The paper investigates what happens to living standards, unemployment and the location of the native population under different assumptions about returns to scale.

Suggested Citation

  • Robert Rowthorn, 2008. "Returns to Scale and the Economic Impact of Migration," Spatial Economic Analysis, Taylor & Francis Journals, vol. 3(2), pages 151-158.
  • Handle: RePEc:taf:specan:v:3:y:2008:i:2:p:151-158 DOI: 10.1080/17421770801996300

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    References listed on IDEAS

    1. Rikard Forslid & Gianmarco I.P. Ottaviano, 2003. "An analytically solvable core-periphery model," Journal of Economic Geography, Oxford University Press, vol. 3(3), pages 229-240, July.
    2. Ottaviano, Gianmarco I. P., 2001. "Monopolistic competition, trade, and endogenous spatial fluctuations," Regional Science and Urban Economics, Elsevier, vol. 31(1), pages 51-77, February.
    3. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    4. Baldwin, Richard E. & Krugman, Paul, 2004. "Agglomeration, integration and tax harmonisation," European Economic Review, Elsevier, vol. 48(1), pages 1-23, February.
    5. Currie, Martin & Kubin, Ingrid, 2006. "Chaos in the core-periphery model," Journal of Economic Behavior & Organization, Elsevier, vol. 60(2), pages 252-275, June.
    6. Forslid, Rikard, 1999. "Agglomeration with Human and Physical Capital: an Analytically Solvable Case," CEPR Discussion Papers 2102, C.E.P.R. Discussion Papers.
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    More about this item


    Migration; regions; returns to scale; agglomeration economies; R11; R12; R15;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods


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