Emigration, Wage Inequality and Vanishing Sectors
University of Nottingham, GEP Research Paper 2009/20
17 Pages Posted: 11 Nov 2009
Date Written: November 9, 2009
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.
Keywords: skill, emigration, wages, inequality, reallocation
JEL Classification: D5, F2, J61
Suggested Citation: Suggested Citation