Author: István Tamás KónyaPublisher:
ISBN:
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Languages : en
Pages :
Book Description
The dissertation examines the interplay among migration, international trade and culture. The first two chapters analyze the role of culture in migration and foreign trade, and the third chapter explains how trade and migration can lead to large regional inequalities even in a small country. Chapter One uses a general equilibrium model of two countries to examine the role of cultural conflict in immigration and immigration policy. The equilibrium outcome is contrasted with the social planner's solution and policy recommendations are given. The main result is that immigration policy has to target the size and composition of immigration flows at the same time. It is shown that some popular policy tools that fail to take this into account result in suboptimal outcomes. The model also predicts that there are structural differences in immigration from developed, middle income and poor source countries. Thus an optimal immigration policy would be conditioned on the characteristics of the source country. Chapter Two studies a particular way to endogenize transportation costs that captures some basic properties of cultural and language barriers. In particular, cultural barriers can be overcome by learning, but the learning decision is subject to externalities and economies of scale. Thus learning decisions are in general inefficient and there is a role for the social planner to subsidize or tax learning. The model also predicts that under some circumstances it is beneficial for a country to tax learning unilaterally. This practice can be called "cultural protectionism", and it is similar in its mechanism to strategic trade policy. Thus the model can rationalize the attempt of some countries to promote their own language and culture over others. Chapter Three examines the interplay between migration and international trade. It explains how income differentials emerge between regions of a particular country as a consequence of foreign trade, and how these differentials are magnified by subsequent migration. The model introduces human capital heterogeneity and migration costs into an increasing-returns-to-scale trade framework with transportation costs. The main contribution of the model is to show that in the presence of human capital heterogeneity even a small migration flow can lead to large regional inequalities if it involves the most skilled. Thus even trivial geographical differences can lead to large regional inequalities in a short period of time, if migration of skilled people is taken into account.
