A Heckscher–Ohlin–Samuelson Model of Immigration and Capital Transfers

Robert Kohn ()

Open Economies Review, 2001, vol. 12, issue 4, 379-387

Abstract: Given that the flow of immigrants from a developing country to an industrialized country increases with the gap in living standards, a welfare version of a Heckscher–Ohlin–Samuelson model is developed in which the equilibrium level of per capita utility in the developing country is some fixed fraction of that in the industrialized country. In searching for an optimal combination of immigration to the industrial country and capital transfer to the poorer country in order to raise that country's standard of living and reduce the number of emigrants, it is found that the international optimum is a corner solution with zero immigration and a positive capital transfer. Copyright Kluwer Academic Publishers 2001

Keywords: immigration; capital transfer; foreign aid; consumption per capita; income gap (search for similar items in EconPapers)
Date: 2001
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DOI: 10.1023/A:1017930900126

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