IDEAS home Printed from
   My bibliography  Save this paper

Trade, migration, and environment: a general equilibrium analysis, Chapter 2.3


  • Chichilnisky, Graciela
  • Di Matteo, Massimo


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.

Suggested Citation

  • Chichilnisky, Graciela & Di Matteo, Massimo, 1998. "Trade, migration, and environment: a general equilibrium analysis, Chapter 2.3," MPRA Paper 8819, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:8819

    Download full text from publisher

    File URL:
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    1. 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.
    2. Chichilnisky, Graciela, 1986. "A general equilibrium theory of North-South trade," MPRA Paper 8810, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    More about this item


    general equilibrium; migration; international trade; environment; labor migration; wage differentials; resource extraction; welfare; policy;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • F18 - International Economics - - Trade - - - Trade and Environment
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. 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) or (Rebekah McClure). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.