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Labor Mobility, Trade, and Social Capital

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  • Maurice Schiff

Abstract

Labor market integration raises welfare in the absence of distortions. This paper examines labor and goods market integration in a general‐equilibrium model with social capital. The findings are: (i) labor market integration has an ambiguous impact on welfare, and raises it if the goods and labor skills are sufficiently different; (ii) compared to Pareto optimum, labor mobility (social capital) is excessively large (depleted); (iii) trade is superior to labor market integration if trading costs are no higher than private migration costs, otherwise the outcome is ambiguous; and (iv) the creation of new institutions in response to labor market integration has an ambiguous impact on welfare.

Suggested Citation

  • Maurice Schiff, 2004. "Labor Mobility, Trade, and Social Capital," Review of International Economics, Wiley Blackwell, vol. 12(4), pages 630-642, September.
    • Handle: RePEc:bla:reviec:v:12:y:2004:i:4:p:630-642
    DOI: 10.1111/j.1467-9396.2004.00471.x
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    Cited by:

    1. João Ribeiro Butiam Có, 2009. "Teorias e dinâmicas migratórias internacionais: algumas experiências africanas de "brain drain","brain circulation" e "brain gain"," Working Papers wp022009, Socius, Socio-Economics Research Centre at the School of Economics and Management (ISEG) of the Technical University of Lisbon.
    2. Marina Della Giusta & Uma Kambhampati, 2006. "Women migrant workers in the UK: social capital, well-being and integration," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(6), pages 819-833.

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    More about this item

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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