Table of Contents
International Journal of Population Research
Volume 2014 (2014), Article ID 858460, 8 pages
http://dx.doi.org/10.1155/2014/858460
Research Article

Emigration, Immigration, and Skill Formation: The Case of a Midstream Country

School of Economics, Chukyo University, 101-2 Yagotohonmachi, Showaku, Nagoya 4668666, Japan

Received 7 January 2014; Revised 26 May 2014; Accepted 9 June 2014; Published 30 June 2014

Academic Editor: Alberto Davila

Copyright © 2014 Kenji Kondoh. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This study theoretically investigates the economy of a small country that exports skilled labor to higher developed countries and simultaneously imports unskilled labor from lower developed countries. Compared with the free immigration case, if this country adopts an optimally controlled immigration policy by imposing income tax on immigrants to maximize national income, skills formation is negatively affected and the number of domestic unskilled workers increases. Moreover, under certain conditions, we can assert the counter-intuitive possibility that the wage rate of domestic unskilled workers may decrease but that of skilled workers may increase owing to the restriction of foreign unskilled workers.