Emigration, Wage Inequality and Vanishing Sectors
Centre for Studies in Social Sciences, Calcutta; City University of Hong Kong (CityUHK) - Department of Economics & Finance
Centre for Studies in Social Sciences, Calcutta; Institute for the Study of Labor (IZA)
November 9, 2009
University of Nottingham, GEP Research Paper 2009/20
Emigration leads to finite changes in structure of production and sectors vanish because they cannot pay higher wages. Does emigration of one type of labour hurt the other non-emigrating type in this set up? We demonstrate various scenarios when real income of the emigrating and the non-emigrating type do not move together and in the process generalize some of the existing results in the literature. In particular emigration can lead to a drastic change in the degree of inequality depending on which sectors survive in the post-emigration scenario.
Number of Pages in PDF File: 17
Keywords: skill, emigration, wages, inequality, reallocation
JEL Classification: D5, F2, J61working papers series
Date posted: November 11, 2009
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