Unemployment and immiserizing transfer

Beladi, Hamid

doi:10.1007/bf01227524

Cited by 16 publications

(4 citation statements)

References 23 publications

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“…Later studies nevertheless discover that the paradox can still occur for untied aid when distortions exist in the economy. Distortions include production externalities (Bhagwati et al., 1985), import tariffs (Jones, 1985), and sectoral unemployment (Beladi, 1990). Kemp and Kojima (1985) and Schweinberger (1990), on the other hand, consider tied aid as another type of distortion and demonstrate that tying aid to consumption can also cause a transfer paradox.…”

Section: Introductionmentioning

confidence: 99%

Foreign Aid, Wage Inequality, and Welfare for a Small Open Economy with Tourism

Chao

Laffargue

Sgro

2010

Review of International Economics

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While the welfare effect of foreign aid has been extensively analyzed, the impact on the distribution of income has received less attention. At the same time, there has been recent work on tourism where it is complementary to aid in improving welfare. By combining these two strands, this paper concentrates on wage inequality in developing countries. We find that an increase in aid in the form of tied aid can lower the relative price of nontraded goods. The rent extracted from tourists declines, reducing welfare of domestic residents. In addition, the fall in the nontradable price can widen the wage inequality between skilled and unskilled workers. Thus, increased foreign aid may have detrimental effects on national welfare and the distribution of income. Rising wage inequality is confirmed by numerical simulations. Copyright � 2010 Blackwell Publishing Ltd.

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Section: Introductionmentioning

confidence: 99%

Foreign Aid, Wage Inequality, and Welfare for a Small Open Economy with Tourism

Chao

Laffargue

Sgro

2010

Review of International Economics

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“…In effect, the transfer may shift resources into or out of the unproductive 'unemployment' sector, see Bhaduri and Skarstein (1996). Before turning to the interaction between non-traded goods and unemployment, we first analyze the model of sticky-wage unemployment outlined in section 3 in the absence of non-traded goods, see also Berthélemy (1988) and Beladi (1990). It is convenient to define:…”

Section: The Unemployment Modelmentioning

confidence: 99%

Transfers, Non-Traded Goods, and Unemployment: An Analysis of the Keynes - Ohlin Debate

Brakman

Marrewijk

2005

SSRN Journal

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“…However, later studies indicate that the transfer paradox can occur for the economies with distortions (cf. Beladi, 1990). Hatzipanayotou and Michael (2000) extended the analysis by considering the employment effect of foreign aid on the recipient country.…”

Section: Introductionmentioning

confidence: 99%

Foreign Aid, Government Spending, and the Environment

Chao¹,

Hu²,

Lai³

et al. 2012

Review Development Economics

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Using an endogenous growth model, this paper examines the growth and welfare effects of the allocation of foreign aid in the recipient economy. As public inputs are a productive factor, a rise in the allocation of aid to the public inputs increases growth and hence the welfare of the economy. However, raising the ratio of aid to pollution abatement may not help an economy, because it crowds out public inputs. Since public inputs are also partly financed by income taxation, the welfare‐maximizing income tax rate is larger than the growth‐maximizing rate, because a portion of the aid constitutes a lump‐sum transfer and can increase household consumption and hence welfare.

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Unemployment and immiserizing transfer

Cited by 16 publications

References 23 publications

Foreign Aid, Wage Inequality, and Welfare for a Small Open Economy with Tourism

Foreign Aid, Wage Inequality, and Welfare for a Small Open Economy with Tourism

Transfers, Non-Traded Goods, and Unemployment: An Analysis of the Keynes - Ohlin Debate

Foreign Aid, Government Spending, and the Environment

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