Luthando Mzilikazi Eco335 Essay
Table of Contents
1. Introduction 2
2. The analytical framework: The Rybczynski theorem 2
3. The application of the Rybczynski theorem: Zimbabwean immigration in South Africa 3
3.1 Impact on production 3
3.2 Impact on wage 4
4. Emergent winners and losers from tightened immigration policy 5
4.1 The winners resulting from the policy amendment 5
4.2 The losers resulting from the policy amendment 5
5. Concluding remarks 6
6. Reference List 7
7. Plagiarism declaration 9
8. Turnitin Results 10
1. Introduction
The recent xenophobic attacks in South Africa (SA) has raised questions concerning the potential welfare loss experienced by a host country as labour immigration increases. The most concerning welfare loss is that of increased SA labour unemployment and decreased wages for low skilled workers which is mainly attributed to increased high skilled immigrants (Consultancy Africa Intelligence, 2013).
This essay aims to use the Rybczynski theory as the analytical framework to examine the change in production composition and wage variation in SA that can be attributed to immigration patterns. This essay is structured as follows; section two discusses the Rybczynski theory and its assumptions. Then, section three provides an application of the Rybczynski theory in the case of South Africa. This is followed by section four which covers a discussion on the winners and losers as a result of the tightened immigration laws in South Africa. Lastly, section five offers a conclusion to this essay.
2. The analytical framework: The Rybczynski theorem
The Rybczynski theory states that where there are two factors of production producing two different final goods at constant final prices, increased supply of a factor of production will increase the production of the good that uses this factor intensively. Thus, the production of the other good decreases provided production is in equilibrium (Rybczynski, 1955).
The scholar refined his restrictions to a 2x2x2 model
1. Introduction 2
2. The analytical framework: The Rybczynski theorem 2
3. The application of the Rybczynski theorem: Zimbabwean immigration in South Africa 3
3.1 Impact on production 3
3.2 Impact on wage 4
4. Emergent winners and losers from tightened immigration policy 5
4.1 The winners resulting from the policy amendment 5
4.2 The losers resulting from the policy amendment 5
5. Concluding remarks 6
6. Reference List 7
7. Plagiarism declaration 9
8. Turnitin Results 10
1. Introduction
The recent xenophobic attacks in South Africa (SA) has raised questions concerning the potential welfare loss experienced by a host country as labour immigration increases. The most concerning welfare loss is that of increased SA labour unemployment and decreased wages for low skilled workers which is mainly attributed to increased high skilled immigrants (Consultancy Africa Intelligence, 2013).
This essay aims to use the Rybczynski theory as the analytical framework to examine the change in production composition and wage variation in SA that can be attributed to immigration patterns. This essay is structured as follows; section two discusses the Rybczynski theory and its assumptions. Then, section three provides an application of the Rybczynski theory in the case of South Africa. This is followed by section four which covers a discussion on the winners and losers as a result of the tightened immigration laws in South Africa. Lastly, section five offers a conclusion to this essay.
2. The analytical framework: The Rybczynski theorem
The Rybczynski theory states that where there are two factors of production producing two different final goods at constant final prices, increased supply of a factor of production will increase the production of the good that uses this factor intensively. Thus, the production of the other good decreases provided production is in equilibrium (Rybczynski, 1955).
The scholar refined his restrictions to a 2x2x2 model