TIME PREFERENCE AND LABOR MIGRATION IN AN OLG MODEL WITH LAND AND CAPITAL

This paper constructs a two-country migration model in the lines of Ga lor (1986), in which the world population consists of individuals of t wo types who have different time preferences. Production uses three in puts: mobile labour, immobile capital and land. It is shown that both countries are necessarily inhabited by agents of both types and exhibi t equal density of population and equal interest rate at the steady st ate equilibrium of the integrated economy. The steady state welfare im plications of international labour migration are studied.