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Is a Policy of Free Movement of Workers Sustainable?

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  • Pierre M. Picard
  • Tim Worrall

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.
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Suggested Citation

  • Pierre M. Picard & Tim Worrall, 2016. "Is a Policy of Free Movement of Workers Sustainable?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 118(4), pages 718-754, October.
    • Handle: RePEc:bla:scandj:v:118:y:2016:i:4:p:718-754
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    File URL: http://hdl.handle.net/10.1111/sjoe.2016.118.issue-4
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    Cited by:

    1. Fields, Gary & Song, Yang, 2020. "Modeling migration barriers in a two-sector framework: A welfare analysis of the hukou reform in China," Economic Modelling, Elsevier, vol. 84(C), pages 293-301.

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    More about this item

    JEL classification:

    • 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

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