Agritourism, the Inflow of Foreign Workers, and Economic Welfare in Developed Countries

This study examines the effects of labour inflow into a developed country with the agritourism sector under free trade and capital movement. The country comprises two regions: an urban area where the manufacturing sector is located and a rural area where both the agricultural and agritourism sectors are located. We assume free labour mobility between the two areas and structural, frictional unemployment in the urban area. We demonstrate that under environmentally friendly agritourism and other reasonable assumptions, additional inflow of permanent immigrants without remittance will enhance the natural environment, the rural wage rate, and domestic welfare, and will reduce the urban unemployment rate and urban-rural wage gap. However, additional inflow of cross-border commuter workers who remit all their income to the home country will not cause any changes to the economy of the host country.