The transmission of Dutch disease and labour migration

Wahba, Jackline

doi:10.1080/09638199800000019

Cited by 46 publications

(13 citation statements)

References 6 publications

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“…Regressions (22)–(25), show that, using either resource wealth and manufacturing measures, α 1 is positive and significant, indicating that resource‐rich states have, on average, faster‐growing manufacturing sectors. Therefore, Dutch Disease symptoms are indeed reversed in these states, and are passed on to the resource‐poor (factor‐exporting) ones, consistent with Wahba's () theory and our model. Interpreting magnitudes, the main results suggest that, on average, a 1 percentage point increase in state‐level GDP share of primary output increases the growth of the manufacturing sector by one‐fifth of a percentage point when manufacturing output is considered and by one‐twentieth of a percentage point when manufacturing employment is considered.…”

Section: Empirical Testingsupporting

confidence: 88%

Dutch Disease, factor mobility, and the Alberta Effect: the case of federations

Raveh

2013

Canadian J of Economics

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Do reduced costs of factor mobility mitigate Dutch Disease effects to the extent that they are reversed? The case of federations provides an indication they do. We observe resource blessing (curse) effects at the provincial (federal) level, and argue the difference in outcomes stems from the difference in factor mobility costs. We construct a simple tax competition model which shows that if factor mobility costs are sufficiently low, a resource-boom triggers an Alberta Effect that mitigates, and possibly reverses, Dutch Disease symptoms. The paper concludes with empirical evidence for the main implications of the model. JEL classification: Q33, R50 La maladie hollandaise, la mobilité des facteurs, et l'effet Alberta -le cas des fédérations.Est-ce que les coûts réduits de la mobilité des facteurs atténuent les effets de la maladie hollandaise au point d'en renverser l'impact? Le cas des fédérations fournit une indication que c'est le cas. Partant des effets d'un boom (malédiction) dans le secteur des ressources au niveau provincial (fédéral), on suggère que la différence dans les impacts est attribuablè a la différence dans les coûts de la mobilité des facteurs. On construit un modèle simple de concurrence fiscale qui montre que si les coûts de la mobilité des facteurs sont suffisamment bas, un boom de ressources déclenche un effet Alberta qui atténue et possiblement renverse les symptômes de la maladie hollandaise. Le texte conclut avec des résultats empiriques pour les implications du modèle.

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Section: Empirical Testingsupporting

confidence: 88%

Dutch Disease, factor mobility, and the Alberta Effect: the case of federations

Raveh

2013

Canadian J of Economics

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“…18 However, we can compare between spatial effects: in absolute terms the spatial capital RME is stronger than the labour one; as will be evident later, this interpretation is potentially important to understand the effects on exports. These results imply that a 'spatial DD' is indeed a relevant possibility; resource windfalls in neighbouring regions present a negative externality, consistent with related theoretical arguments made by Raveh (2013) and Wahba (1998).…”

Section: The Spatial Channelsupporting

confidence: 88%

An Empirical Analysis of a Regional Dutch Disease: The Case of Canada

Papyrakis

Raveh

2013

Environ Resource Econ

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While there has been extensive research on the Dutch Disease (DD), very little attention, if any, has been devoted to the regional mechanisms through which it may manifest itself. This is the first empirical attempt to research a 'regional DD' by looking at the local and spatial impacts of resource windfalls across Canadian provinces and territories. We construct a new panel dataset to examine separately the key DD channels; namely, the Spending Effect (SE) and the Resource Movement Effect (RME). Our analysis reveals that the standard DD mechanisms are also relevant at the regional level; specifically, we find that: (a) Resource windfalls are associated with higher inflation and a labour (capital) shift from (to) non-primary tradable sectors. (b) Resource windfalls in neighbouring regions are associated with a capital (labour) shift from (to) non-primary tradable sectors in the source region. (c) The (spatial) DD explains (51%) 20% of the adverse effects of resource windfalls (in neighbouring regions) on region-specific non-mineral international exports (in the source region), and does not significantly affect domestic ones.

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“…With this migration channel, Dutch disease can be propagated to nonbooming regions by a labour-reallocation effect. 7 The idea that migration may have important effects on countries that experience a sudden income surge is not new and has already been considered theoretically by Corden (1984), Wahba (1998) and van der Ploeg (2011). Caselli and Michaels (2013) nevertheless observe that interregional migration flows have not happened following oil windfalls among Brazilian communities.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Dutch Disease and the Mitigation Effect of Migration: Evidence from Canadian Provinces

Beine

Coulombe

Vermeulen

2014

Econ J

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper looks at whether immigration can mitigate the Dutch disease effects associated with booms in natural resource sectors. We first derive predicted changes in the size of the non-tradable sector from a small general-equilibrium model à la Obstfeld-Rogoff, supplemented by a resource income and a varying labour supply. Using data for Canadian provinces, we test for the existence of a mitigating effect of immigration in terms of an increase in the size of the non-tradable sector triggered by the positive resource shock in booming regions. We find evidence of such an effect for the aggregate inflow of migrants. Disentangling those flows by type of migrants, we find that the mitigation effect is due mostly to interprovincial migration and temporary international migration. There is no evidence of such an effect for permanent international immigration. Nevertheless, interprovincial migration also results in a spreading effect of Dutch disease from booming to non-booming provinces. Terms of use: Documents inJEL-Code: F220, O150, R110, R150.

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The transmission of Dutch disease and labour migration

Cited by 46 publications

References 6 publications

Dutch Disease, factor mobility, and the Alberta Effect: the case of federations

Dutch Disease, factor mobility, and the Alberta Effect: the case of federations

An Empirical Analysis of a Regional Dutch Disease: The Case of Canada

Dutch Disease and the Mitigation Effect of Migration: Evidence from Canadian Provinces

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