An Equilibrium Model of Guest-Worker Migration

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Abstract
This paper examines the problem of guest-worker migration in an economy populated by identical, utility-maximizing agents with finite lives. The decision to migrate, the savings rate while abroad, and the migrants stay in the foreign country as viewed as the solution to an intertemporal optimization problem. The paper analyzes the determinants of the equilibrium flow of migrants, the domestic wage, and worker welfare. Effects of an emigration tax are also investigated.

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