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The macroeconomic impact of foreign labour influx into the industrialized nation state and the complementary policies

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  • Yong-Yil Choi

Abstract

This paper makes a numerical assessment on the macroeconomic impact of foreign labor influx into the industrialized nation state allowing free trade in goods but imposing an immigration quota on labor, and then explores the complementary policies for the impact of foreign labor influx. One of the main findings is that immigration itself brings welfare gains only if prices are flexible, but a skill-biased intake policy can bring a much larger welfare gain. The complementary policy options to boost welfare gains by immigration increase are monetary expansion, adopting foreign components more, and influencing foreign demand for intermediate goods indirectly by inviting foreign direct investment. For these policies to cope, the destination country should try to correct the market structure so that prices can be flexible.

Suggested Citation

  • Yong-Yil Choi, 2004. "The macroeconomic impact of foreign labour influx into the industrialized nation state and the complementary policies," Applied Economics, Taylor & Francis Journals, vol. 36(10), pages 1057-1063.
    • Handle: RePEc:taf:applec:v:36:y:2004:i:10:p:1057-1063
    DOI: 10.1080/0003684042000246777
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    Cited by:

    1. Phillips, Kerk L., 2010. "The Dynamic Effects of Changes to Japanese Immigration Policy," MPRA Paper 23673, University Library of Munich, Germany.
    2. Scott C. Bradford & Kerk L. Phillips, 2021. "Dynamic effects of changes to Japanese immigration policy," Pacific Economic Review, Wiley Blackwell, vol. 26(1), pages 3-22, February.
    3. Phillips, Kerk L., 2010. "A Dynamic General Equilibrium Analysis of Japanese & Korean Immigration," MPRA Paper 23501, University Library of Munich, Germany.

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