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Efficiency Wages And International Factor Mobility

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Author Info
THOMAS J. CARTER
Abstract

This paper incorporates efficiency wages into the Heckscher-Ohlin model. The capital intensive sector pays higher wages than the other sector. One result is that tariffs to attract capital increase welfare by increasing the quality, not quantity, of jobs available. However, there are distributional effects among laborers. Some see an increase in wages, others become unemployed. The paper also investigates policies in the presence of illegal immigration. If immigration cannot be limited, a high wage country is best served by a capital outflow that eliminates the incentive for the labor inflow. Again, there are distributional effects among the workers. [F20]

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Publisher Info
Article provided by Korean International Economic Association in its journal International Economic Journal.

Volume (Year): 7 (1993)
Issue (Month): 1 (April)
Pages: 13-29
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Handle: RePEc:taf:intecj:v:7:y:1993:i:1:p:13-29

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  1. Sparks, Roger, 1986. "A Model of Involuntary Unemployment and Wage Rigidity: Worker Incentives and the Threat of Dismissal," Journal of Labor Economics, University of Chicago Press, vol. 4(4), pages 560-81, October. [Downloadable!] (restricted)
  2. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June. [Downloadable!] (restricted)
  3. William T. Dickens & Lawrence F. Katz, 1987. "Interindustry Wage Differences and Industry Characteristics," NBER Working Papers 2014, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Alan B. Krueger & Lawrence H. Summers, 1987. "Reflections on the Inter-Industry Wage Structure," NBER Working Papers 1968, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Salop, Steven C, 1979. "A Model of the Natural Rate of Unemployment," American Economic Review, American Economic Association, vol. 69(1), pages 117-25, March. [Downloadable!] (restricted)
  6. Neary, J Peter, 1978. "Dynamic Stability and the Theory of Factor-Market Distortions," American Economic Review, American Economic Association, vol. 68(4), pages 671-82, September. [Downloadable!] (restricted)
  7. Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82. [Downloadable!] (restricted)
  8. Brecher, Richard A. & Choudhri, Ehsan U., 1987. "International migration versus foreign investment in the presence of unemployment," Journal of International Economics, Elsevier, vol. 23(3-4), pages 329-342, November. [Downloadable!] (restricted)
  9. Burgess, David F, 1978. "On the Distributional Effects of Direct Foreign Investment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(3), pages 647-64, October. [Downloadable!] (restricted)
  10. Rivera-Batiz, Francisco L, 1981. "The Effects of Immigration in a Distorted Two-Sector Economy," Economic Inquiry, Oxford University Press, vol. 19(4), pages 626-39, October.
  11. Copeland, Brian R., 1989. "Efficiency wages in a Ricardian model of international trade," Journal of International Economics, Elsevier, vol. 27(3-4), pages 221-244, November. [Downloadable!] (restricted)
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  12. Das, Satya P., 1981. "Effects of foreign investment in the presence of unemployment," Journal of International Economics, Elsevier, vol. 11(2), pages 249-257, May. [Downloadable!] (restricted)
  13. Jones, Ronald W., 1984. "Protection and the harmful effects of endogenous capital flows," Economics Letters, Elsevier, vol. 15(3-4), pages 325-330. [Downloadable!] (restricted)
  14. Schweinberger, Albert G., 1979. "The theory of factor price differentials : The case of constant absolute differentials," Journal of International Economics, Elsevier, vol. 9(1), pages 95-115, February. [Downloadable!] (restricted)
  15. Richard A. Brecher, 1980. "Increased Unemployment from Capital Accumulation in a Minimum-Wage Model of an Open Economy," Canadian Journal of Economics, Canadian Economics Association, vol. 13(1), pages 152-58, February. [Downloadable!] (restricted)
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