Is a Policy of Free Movement of Workers Sustainable?

37 Pages Posted: 17 Nov 2016

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

Multiple version iconThere are 2 versions of this paper

Date Written: October 2016

Abstract

In this paper, we study the costs and benefits of the adoption of a policy of free movement of workers. For countries to agree on uncontrolled movements of workers, short‐run costs must be outweighed by the long‐term benefits of better labor‐market flexibility and income smoothing. We show that such a policy is less likely to be adopted when workers are more impatient and less risk‐averse, when production technologies display stronger decreasing returns, and when countries trade a significant 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? (October 2016). The Scandinavian Journal of Economics, Vol. 118, Issue 4, pp. 718-754, 2016, Available at SSRN: https://ssrn.com/abstract=2870829 or http://dx.doi.org/10.1111/sjoe.12163

Pierre M. Picard (Contact Author)

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

Campus Limpertsberg
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Luxembourg

Universite du Luxembourg

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Luxembourg

Tim S. Worrall

University of Edinburgh ( email )

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Edinburgh, Scotland EH8 9JY
United Kingdom
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HOME PAGE: http://www.timworrall.com

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