Capital Export, Unemployment, and Illegal Immigration

Günther Schulze

No 1394, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper analyses capital export controls under majority voting. It is shown that individuals vote according to their factor endowment ratio. An individual’s optimal restriction is tighter, the lower their capital-labour ratio and the larger the country; it is also tighter if unemployment prevails. If there is illegal immigration, however, results are dramatically reversed: the conflict of interests collapses and all individuals favour unrestricted capital export until immigration is eliminated – regardless of their relative factor endowment.

Keywords: Capital Controls; Capital Export; Illegal Immigration; International Political Economy (search for similar items in EconPapers)
JEL-codes: D33 D72 F2 F21 F22 (search for similar items in EconPapers)
Date: 1996-05
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