Economic Welfare, International Factor Mobility and Non-tradeable Goods
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Economic Welfare, International Factor Mobility and Non-tradeable Goods
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 114 (1994), Iss. 1 : pp. 25–40
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Rübel, Gerhard
Abstract
This paper examines the welfare situation of existing residents of a country when factor immigration occurs. There is always an increase in welfare when there are nontradeable goods and a fall in overall capital intensity. If the non-tradeable good is relatively labor-intensive, the increase in the existing residents' welfare is larger, the larger the proportion of their income the immigrant workers send back to their country of origin. However, if the non-tradeable good is relatively capital intensive, the improvement in welfare is smaller, the larger the remittances.