Kaldorian Disaggregation, Temporary Migration and Domestic Welfare
Review of Development Economics
Published online on April 13, 2016
Abstract
We build a model with two agents: domestic residents and temporary immigrants. The model incorporates Kaldorian disaggregation, with the two groups consuming different goods produced in the economy. It is established that, under certain conditions, an increase in immigrant labor lowers the welfare of the domestic residents. This runs against conventional wisdom that temporary immigration enhances the welfare of domestic residents.