Wages, Labour Mobility and International Trade
GLOBALIZATION AND THE DEVELOPING ECONOMIES, Aditya Bhattacharjea, Sugata Marjit, eds., pp. 135-156, Manohar Publishers, 2004
33 Pages Posted: 16 Jan 2008
This paper provides a detailed survey on the literature on trade and migration. We discuss several aspects on international mobility of labor with heterogeneous skill types and relate that to the movement of goods and services between nations, as also the issue of welfare and capital formation in the source countries. Further, we look at the implications of labor emigration from a small open economy on pre-existing wage-gap between the skilled and the unskilled. We show that the unskilled emigration may worsen the wage-gap, whereas skill emigration can reduce wage inequality, although absolute wages increase with emigration.
Keywords: Skilled labor, Emigration, Income share, Wage inequality
JEL Classification: F22, J31, O15
Suggested Citation: Suggested Citation