Abstract

We develop the standard (two-country, one-good, two-factor) model of international immigration, in which we have unemployment in the host (capital abundant) country and in the foreign (labor abundant) country. Our main result is that the introduction of a profit-sharing plan by the host country causes: (1) Employment of domestic labor increases, (2) immigration decreases, (3) the domestic (foreign) country’s welfare rises (falls), and, under certain circumstances, (4) global welfare rises in the presence of international capital immobility.KeywordsHost CountryForeign CountryForeign CapitalCapital MobilityDomestic LaborThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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