Answer

Ricardian, Specific Factor, and Hecksher-Ohlin Models

Immigration policies remain one of the critical debates that countries have, especially amidst the rising global refugee crises and illegal immigration. This has pushed policymakers and ordinary citizens to demand responsive action from the government to promote national sovereignty and social welfare by limiting the number of people entering the country. However, it is essential to consider not only the social and political impact of immigration but also the economic aspects, particularly in line with productivity and improvement of living standards. This creates the need to use economic models to help advice the government on the right stance to take when formulating immigration policies. This forms the intents of this paper to examine the differences between Ricardian, Specific Factor, and Hecksher-Ohlin Models with a precise examination of the underlying economic truths and significance in labor supply explanation.  

The Ricardian model focuses on a country’s comparative advantage when competing in the international market. It makes suggestions that countries specialize in producing those goods and services that they can do best and efficiently. According to Ricardo, there is only one factor of production, labor. However, the differences in level and quality of production depend on the technology; that is; technological differences explain the trade that occurs between countries and their labor productivity differences. However, since technology changes in the long-run, the model is only applicable in the short-run. Since labor is immobile, this model can be useful in formulating immigration policies. A permanent increase in labor under this model will only increase the competitive edge with a subsequent rise in technology.

In contrast, the Heckscher-Ohlin model assumes the availability of two factors of production, labor, and capital, which are essential in productivity within the country. The comparative advantage in this aspect, therefore, relies on the relative amounts of each of the two factors of production. According to the model, a country can be efficient by producing and exporting goods using the production factor it has in abundance while importing those that it has a low supply. Countries with more capital can produce capital-intensive goods with those with more labor to produce labor-intensive products. Furthermore, under this model, labor and capital can easily flow between sectors but not across the borders. Thus, it does not take care of immigration issues, with a permanent increase in labor under this model, the country with embracing more labor-intensive production.

The specific factor model has significant relationships with the Ricardian model and expresses substantial differences in terms of the economic truths revealed in labor concerns. Under this model, production depends on two factors of which one is immobile, in this case, capital, while the other remains mobile, in this case, labor. Although trade differences may arise because of other inducements such as technology, the model assumes that the mobile factor allocation plays a critical role in production efficiency. This then explains the concept of the labor movement in the form of immigration, which can increase labor endowment as a factor of production.

Through an examination of these models, I would advise the government to embrace the Ricardian model, which puts much emphasis on the technological prowess of the country. Although the immigrants are likely to experience an improvement in the living standards, they are likely to prove wasteful to society if they do not have the necessary skills to make them productive in the market. In other words, their presence in the country is only useful depending on their productivity, without which they will only disadvantage the country in international trade and global competition.