Trade, migration, and environment: a general equilibrium analysis, Chapter 2.3
Two major trends in the world economy are international migration and environmental degradation. The object of the paper is to analyze the connection between these two trends, which have generally been analyzed in isolation. Here we represent a world economy in which the exploitation of natural resources as well as the migration of labor have a global character. We discuss the welfare impact of migration and exploitation of natural resources and policies to address these issues. The main results of the paper are as follows. Migration is prompted by wage differentials as technology is different across countries. We show that migration from the South induces a decrease in the exploitation of the resource in the South. This increases the welfare of the South but can decrease that of the North. Migration can lead to higher prices ofresources in the North and in the South, setting up a process of induced technical change in the North and better terms of trade for the South, altogether a positive outcome. As is intuitively obvious, migration reduces the wage differential between North and South in a model where, contrary to Heckscher-Ohlin assumptions, technologies differ between countries. Finally, we show that it is possible that a tax on the use of the resource in the South induces an increase in its extraction rather than a decrease. Trade policies could have a positive impact on resource extraction, could reduce the wage gap and therefore decrease the economic incentive to the mobility of labour.
|Date of creation:||1998|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chichilnisky, Graciela, 1981. "Terms of trade and domestic distribution : Export-led growth with abundant labour," Journal of Development Economics, Elsevier, vol. 8(2), pages 163-192, April.
- Chichilnisky, Graciela, 1986. "A general equilibrium theory of North-South trade," MPRA Paper 8810, University Library of Munich, Germany.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:8819. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.