Trans-boundary Pollution, Optimal Transfer, and International Migration

We analyse the welfare effects of international migration in the presence of trans-boundary pollution. We use a simplifi ed Copeland and Taylor (1999) model, where the (developed) home country’s pollution abatement technology is superior to that of the (less developed) foreign country. For the home country, transferring manufactured good to the foreign country could be optimal so as to reduce the trans-boundary pollution caused by foreign manufacturing industry and improve the productivity of domestic agricultural good under some conditions. If workers migrate from the foreign country to the home country, both total amount of optimal transfer and world economic welfare will increase. JEL Classifi cation Number(s): F22, Q20 1