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Migrant Labor, Unemployment and Optimal Growth

Author

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  • Ioana Viasu

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

Abstract

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.

Suggested Citation

  • Ioana Viasu, 2014. "Migrant Labor, Unemployment and Optimal Growth," Computational Methods in Social Sciences (CMSS), "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences, vol. 2(2), pages 30-38, December.
    • Handle: RePEc:ntu:ntcmss:vol2-iss2-14-030
    as

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    References listed on IDEAS

    as
    1. Gianmarco I. P. Ottaviano & Giovanni Peri, 2021. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 9, pages 245-290, World Scientific Publishing Co. Pte. Ltd..
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    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.
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    More about this item

    Keywords

    immigration; optimal growth; unemployment rate.;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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