Migrant Labor, Unemployment and Optimal Growth
Migrant Labor, Unemployment and Optimal Growth

Summary/Abstract: One of the arguments against migrant labor is that it has negative effect on the employment of domestic labor. The question is now if the immigration has also negative effects on the other variables of the economy. To examine these effects we develop an optimal growth model with migration and unemployment and then we analyze these effects, restricting our analysis to the steady state. We introduce a simplifying hypothesis concerning the skill level of human capital. We assume that the average skill level of domestic employed labor differs from the average skill level of migrant labor, but the two kinds of labor grow at the same constant rate. We prove that the immigration process could have both positive and negative effects on consumption, human capital and physical capital, depending on the skill level of the migrant labor. The numerical simulations confirm our theoretical results

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