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Tourism, guest workers, and resident immiserization

journal contribution
posted on 2003-01-01, 00:00 authored by B Hazari, J J Nowak
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.

History

Journal

Journal of developing areas

Volume

36

Issue

2

Season

Spring

Pagination

101 - 124

Publisher

Western Illinois University

Location

[Macomb, Ill.]

ISSN

0022-037X

eISSN

1548-2278

Language

eng

Publication classification

C1 Refereed article in a scholarly journal

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