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Author Yilmaz, Ilkay
Title Immigration and economic integration
book jacket
Descript 146 p
Note Source: Dissertation Abstracts International, Volume: 65-09, Section: A, page: 3493
Adviser: John D. Wilson
Thesis (Ph.D.)--Michigan State University, 2004
This dissertation contains four chapters, three of which are theoretical and the other is empirical
In the first chapter, by using a probabilistic static model, a possible relationship between the desirability of economic integration and (illegal) immigration is studied. Using the framework developed in Levy (1997), it is shown that migration from a labor abundant country to a capital abundant country leads to economic integration between the two countries. By reducing the median voter's utility in the capital abundant country, migration induces voters to support economic integration. In the second chapter the same relationship is studied within the framework of a dynamic model. As in the first chapter, it is shown that migration might lead to economic integration in the future
The positive relationship between migration and economic integration suggests a complementary relationship between factor movements and goods trade. Showing such a relationship within a Heckscher-Ohlin setting indicates that supplementing the classical Heckscher-Ohlin model with illegal immigration and political economy might render invalid the earlier conclusions (starting with Mundell's classical 1957 paper) that within the standard Heckscher-Ohlin model factor movements and goods trade are undoubtedly substitutes
Both chapters also show that the possibility of economic integration is increasing (decreasing) in income inequality in the relatively labor (capital) abundant country. This result is compatible with Mayer's (1984) prediction that an increase in inequality, holding constant the economy's overall relative endowments, raises trade barriers in capital-abundant economies and lowers them in capital-scarce economies
The third chapter incorporates smuggling to the two-good variant of the dynamic model developed in the second chapter. It shows that the effect of smuggling on the time of economic integration is ambiguous. It suggests that a higher (lower) detection rate of smuggled goods tend to make the time of economic integration, i.e. free trade, later (sooner)
In the last chapter I empirically test the prediction that the possibility of economic integration is increasing (decreasing) in income inequality in the relatively labor (capital) abundant country. I have found that only in democratic countries a positive (negative) relationship exists between the income inequality level in the relatively labor-abundant (capital-abundant) country and the possibility of the FTA
School code: 0128
Host Item Dissertation Abstracts International 65-09A
Subject Economics, General
Economics, Theory
Alt Author Michigan State University
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