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Tourism, Jobs, Capital Accumulation and the Economy: A Dynamic Analysis

Pasquale Sgro (), Chi-Chur Chao, Bharat Hazari, Jean-Pierre Laffargue and Eden Yu
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Jean-Pierre Laffargue: CEPREMAP

No 2005.136, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper examines the effects of tourism in a dynamic model of trade on unemployment, capital accumulation and resident welfare. A tourism boom improves the terms of trade, increases labor employment, but lowers capital accumulation. The reduction in the capital stock depends on the degree of factor intensity. When the traded sector is weakly capital intensive, the expansion of tourism improves welfare. However, when the traded sector is strongly capital intensive, the fall in capital can be a dominant factor in lowering national welfare. This dynamic immiserizing result of tourism on resident welfare is confirmed by simulations on German data.

Keywords: Tourism; Employment; Capital accumulation; Welfare (search for similar items in EconPapers)
JEL-codes: F11 O10 (search for similar items in EconPapers)
Date: 2005-10
New Economics Papers: this item is included in nep-tur
References: View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Tourism, Jobs, Capital Accumulation and the Economy: A Dynamic Analysis (2005) Downloads
Working Paper: Tourism, jobs, capital accumulation and the economy: A dynamic analysis (2005) Downloads
Working Paper: Tourism, jobs, capital accumulation and the economy: A dynamic analysis (2005) Downloads
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