This paper examines the interaction between migration policies of the host and source countries in the context of a model of guest-worker migration. For the host, the objective is to provide low-cost labor for its employers while avoiding illegal immigration. It optimizes over these objectives...

This paper revisits the question of how brain drain affects the optimal education policy of a developing economy. Our framework of analysis highlights the complementarity between public spending on education and students' efforts to acquire human capital in response to career opportunities at...

We study the interaction between the optimal immigration policy of a host country and education policy of a source country in a model of international migration of skilled workers. Acquisition of human capital is driven by the academic and career opportunities at home and abroad. Greater...

A perfect-foresight model of intertemporal utility maximization is used to analyze the current-account effects of a temporary increase in government spending. The relationship between the marginal utility of private consumption and the supply of public goods in the economy is shown to play a...

This paper develops a simple two-country model of illegal immigration to examine the interaction among migrant labour, unemployment rates, and spending by the host country on enforcement. The analysis focusses on the dynamics of immigration policy and its role in determining the mechanism by...

This paper examines the effects of a minimum wage on real income and the composition of the economy's labour force, and studies various policy measures to deal with unemployment problems. It is possible to reduce unemployment by subsidizing education and health services. Policies to restore the...