Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/57969
Authors: 
Beine, Michel
Coulombe, Serge
Vermeulen, Wessel N.
Year of Publication: 
2012
Series/Report no.: 
CESifo working paper: Resource and Environment Economics 3813
Abstract: 
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.
Subjects: 
natural resources
Dutch disease
immigration
mitigation effect
JEL: 
F22
O15
R11
R15
Document Type: 
Working Paper

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