The Northern Immigration Policy in a North-South Economy Model

Abstract

Wooton (1985) considered the immigration into Findlay (1980)’s North-South model and examined how the north’s relaxation of immigration policy influences income in both regions. Based on Wooton (1985), this paper has performed the same analysis assuming there to be a complete capital mobility between the north and the south. The major findings are as follows: In the long-run, the relaxation of the north’s immigration policy does not affect the per capita income of both the northern labour and immigrant workers. When the north practises a discriminative redistribution policy against the immigrant workers, the per capita income in the north will increase because redistribution of income from the immigrant workers to the northern labour as a result of the policy relaxation is taking place.