Tourism, guest workers, and resident immiserization

Hazari, Bharat and Nowak, Jean-Jacques 2003, Tourism, guest workers, and resident immiserization, Journal of developing areas, vol. 36, no. 2, Spring, pp. 101-124.

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Title Tourism, guest workers, and resident immiserization
Author(s) Hazari, Bharat
Nowak, Jean-Jacques
Journal name Journal of developing areas
Volume number 36
Issue number 2
Season Spring
Start page 101
End page 124
Publisher Western Illinois University
Place of publication [Macomb, Ill.]
Publication date 2003
ISSN 0022-037X
Summary This paper analyses the impact of a boom in tourism on the welfare of the residents in the presence of guest workers. Guest workers are employed in the tourism industry and they consume non-traded goods and services. This consumption by guest workers converts non-traded goods into
exportables and creates guest worker generated monopoly power in trade in the home country. It is established that under certain plausible conditions a tourist boom (in the presence of guest workers) results in the immiserization of the resident population. This result arises due to an adverse movement in the terms-of-trade, specifically those associated with the guest workers consumption of non-traded goods. These results are based on a static model of trade and may not be necessarily
valid in a growth model with guest workers, tourism and labor shortages. It is not the object of the paper to be either anti-tourism or anti-guest worker, but only to show a possible source of resident immiserization that is associated with guest workers. This possibility may require correction via a suitable policy both in static and dynamic models.
Language eng
Field of Research 140210 International Economics and International Finance
HERDC Research category C1 Refereed article in a scholarly journal
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Document type: Journal Article
Collections: Faculty of Business and Law
Deakin Business School
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