Is a Policy of Free Movement of Workers Sustainable?

37 Pages Posted: 22 Mar 2014

See all articles by Pierre M. Picard

Pierre M. Picard

Centre de Recherche en Économie Appliquée (CREA); Universite du Luxembourg

Tim S. Worrall

University of Edinburgh

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Abstract

This paper studies the costs and benefits of the adoption of the policy of free movement for workers. For the countries to agree on uncontrolled movement of workers, the short run costs must be outweighed by the long term benefits that result from better labor market flexibility and income smoothing. We show that such policies are less likely to be adopted when workers are impatient and less risk averse workers, when production technologies display decreasing returns and when countries trade a share of their products.

Keywords: labor market flexibility, migration, sustainable plan

JEL Classification: F22, J61

Suggested Citation

Picard, Pierre M. and Worrall, Tim S., Is a Policy of Free Movement of Workers Sustainable?. IZA Discussion Paper No. 8035, Available at SSRN: https://ssrn.com/abstract=2412856

Pierre M. Picard (Contact Author)

Centre de Recherche en Économie Appliquée (CREA) ( email )

Campus Limpertsberg
162A, avenue de la Faïencerie
Luxembourg, 1511
Luxembourg

Universite du Luxembourg

L-1511 Luxembourg
Luxembourg

Tim S. Worrall

University of Edinburgh ( email )

30 Buccleuch Place
Edinburgh, Scotland EH8 9JY
United Kingdom
(0)131 651 5128 (Phone)

HOME PAGE: http://www.timworrall.com

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