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A Small-Open-Economy Analysis of Migration

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  • Flug, Karnit
  • Hercowitz, Zvi
  • Levi, Anat

Abstract

The standard small-open-economy framework is extended to incorporate migration and job search. The model has a dynamic optimization setup with migration costs, where a simple mechanism of job search interacts with the migration decision. The balanced-growth population size is undetermined in this model. However, when conditioned on the current population size, the expected long-run population is finite. The developed framework is used to analyze, theoretically and quantitatively, the effects of an exogenous immigration influx of the magnitude of the ongoing influx to Israel from the C.I.S. The outcome of the model is a set of paths for endogenous emigration, domestic population size, and unemployment.

Suggested Citation

  • Flug, Karnit & Hercowitz, Zvi & Levi, Anat, 1994. "A Small-Open-Economy Analysis of Migration," Foerder Institute for Economic Research Working Papers 275591, Tel-Aviv University > Foerder Institute for Economic Research.
    • Handle: RePEc:ags:isfiwp:275591
    DOI: 10.22004/ag.econ.275591
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    References listed on IDEAS

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    1. Chiswick, Carmel U. & Chiswick, Barry R. & Karras, Georgios, 1992. "The impact of immigrants on the macroeconomy," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 37(1), pages 279-316, December.
    2. Hercowitz, Zvi & Pines, David, 1991. "Migration with fiscal externalities," Journal of Public Economics, Elsevier, vol. 46(2), pages 163-180, November.
    3. Galor, Oded, 1986. "Time preference and international labor migration," Journal of Economic Theory, Elsevier, vol. 38(1), pages 1-20, February.
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