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Using a two-factor, two-good model, where only one of the goods is nontraded, I investigate the effects of immigration on the relative price of the two goods, the wage rate, and the rental price. I also demonstrate that the inflow of foreign workers gives rise to an increase in the welfare of the native inhabitants in the host country, and if the nontraded good is capital (labor) intensive, the inflow of permanent migrants is of more (less) benefit to the native inhabitants than the inflow of cross-border workers.

In this paper, we investigate the effects of an increase in emission tax, a decrease in fixed manufacturing wage rate, and an increased inflow of foreign workers on competitive wages, the environmental stock, the economic welfare of the representative consumer, and employment in the presence of a pollution abatement equipment sector and unemployment. Our main findings are that an increase in emission tax and a decrease in the urban minimum wage rate decrease unemployment, and international immigration may increase the competitive wage rate, employment rate, stock of environmental capital, and economic welfare of the representative worker.

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