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Welfare Effects of Migration in Societies with Indirect Taxes, Income Transfers and Public Good Provision

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  • Michael S. Michael
  • Panos Hatzipanayotou

Abstract

We construct a general equilibrium trade model of a two-class small open host or source country. When consumption tax revenue finances the provision of a public good, marginal migration reduces social welfare in the source country and raises it in the host. When consumption tax revenue is equally distributed among domestic households in each country, then migration has an ambiguous impact on social welfare in either country. When tariff revenue in either country is either equally distributed among domestic households, or it is used to finance the provision of a public good, then migration has an ambiguous effect on social welfare in the host country, and is expected to reduce social welfare in the source.

Suggested Citation

  • Michael S. Michael & Panos Hatzipanayotou, 2000. "Welfare Effects of Migration in Societies with Indirect Taxes, Income Transfers and Public Good Provision," CESifo Working Paper Series 347, CESifo.
    • Handle: RePEc:ces:ceswps:_347
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    References listed on IDEAS

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    Cited by:

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    2. Trevor Campbell, 2004. "The Impact of Real Domestic Income on Indirect Taxes in Barbados with the Use of an Impulse Response Function," Money Affairs, CEMLA, vol. 0(2), pages 155-169, July-Dece.
    3. Panos Pashardes & Soteroula Hajispyrou, 2002. "Consumer Demand and Welfare under Increasing Block Pricing," University of Cyprus Working Papers in Economics 0207, University of Cyprus Department of Economics.
    4. Stefano Bosi & Eleni Iliopulos & Hubert Jayet, 2011. "Optimal Immigration Policy: When The Public Good Is Rival," The Japanese Economic Review, Japanese Economic Association, vol. 62(4), pages 460-484, December.
    5. Jakubiak Igor, 2017. "Migration and Welfare Systems – State of the Art and Research Challenges," Central European Economic Journal, Sciendo, vol. 1(48), pages 51-70, November.
    6. Paweł Kaczmarczyk, 2013. "Are immigrants a burden for the state budget? Review paper," RSCAS Working Papers 2013/79, European University Institute.
    7. Chanelle T. Maxwell & Winston R. Moore, 2004. "External Price Competitiveness and Trade in the Caribbean," Money Affairs, CEMLA, vol. 0(2), pages 137-153, July-Dece.
    8. Yiqing Su & Yanyan Li & Yanggui Liu, 2022. "Common Demand vs. Limited Supply—How to Serve the Global Fight against COVID-19 through Proper Supply of COVID-19 Vaccines," IJERPH, MDPI, vol. 19(3), pages 1-13, January.
    9. Takumi Haibara, 2009. "Environmental Funds, Public Abatement, and Welfare," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 44(2), pages 167-177, October.
    10. Panos Hatzipanayotou & Michael S. Michael, 2005. "Migration, Tied Foreign Aid and the Welfare State," CESifo Working Paper Series 1497, CESifo.
    11. Kaczmarczyk, Pawel, 2015. "Burden or Relief? Fiscal Impacts of Recent Ukrainian Migration to Poland," IZA Discussion Papers 8779, Institute of Labor Economics (IZA).
    12. Takumi HAIBARA, 2006. "Environmental Funds, Public Abatement and Welfare," GSICS Working Paper Series 8, Graduate School of International Cooperation Studies, Kobe University.
    13. Michael S. Michael, 2006. "Are Migration Policies that Induce Skilled (Unskilled) Migration Beneficial (Harmful) for the Host Country?," CESifo Working Paper Series 1814, CESifo.
    14. Chao, Chi-Chur & Hazari, Bharat R. & Sgro, Pasquale M., 2004. "Tourism, globalization, social externalities, and domestic welfare," Research in International Business and Finance, Elsevier, vol. 18(2), pages 141-149, June.
    15. Yu, Wusheng & Hensen, Hans G., 2010. "Modeling Agricultural Domestic Support Policy in China: recent policy reversals and two future scenarios," Conference papers 331919, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    16. Chao, Chi-Chur & Yu, Eden S.H. & Yu, Wusheng, 2009. "Government budget, public-sector wages and capital taxes in a small open economy: A Hong Kong case," China Economic Review, Elsevier, vol. 20(1), pages 54-64, March.
    17. Chi-Chur Chao & Eden S. H. Yu, 2014. "Capital and Consumption Tax Reforms in a Small Open Economy," Review of International Economics, Wiley Blackwell, vol. 22(1), pages 1-12, February.
    18. Mohammad Joarder & Syed Hasanuzzaman, 2008. "Migration decision from Bangladesh: permanent versus temporary," Asia Europe Journal, Springer, vol. 6(3), pages 531-545, November.
    19. Panos Hatzipanayotou & Sajal Lahiri & Michael S. Michael, 2002. "Reforms of Environmental Policies in the Presence of Cross-border Pollution and two Stage Clean Up," University of Cyprus Working Papers in Economics 0203, University of Cyprus Department of Economics.
    20. Juan Antonio Morales, 2004. "Dollarization of Assets and Liabilities: Problem or Solution? The Case of Bolivia," Money Affairs, CEMLA, vol. 0(2), pages 105-135, July-Dece.
    21. Kemnitz, Alexander, 2003. "Unemployment, Technology and the Welfare Effects of Immigration," Discussion Papers 611, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
    22. Kenneth Coates & Edwin Rivera, 2004. "Fiscal Dominance and Foreign Debt: Five Decades of Latin American Experience," Money Affairs, CEMLA, vol. 0(2), pages 83-103, July-Dece.

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