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Minimum Wage, Unemployment and International Migration

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  • Djajic, Slobodan

Abstract

This paper develops a two-country model of international migration in order to study the implications of opening a minimum-wage economy to immigration. It is shown that an inflow of foreign labor may lower the level of income enjoyed by the country's native factors of production. Moreover, while an increase in the level of the minimum wage reduces employment opportunities within the economy, it may also give rise to substitution of foreign for native workers in the remaining positions of employment. Finally, the paper studies the effects of capital accumulation in both countries on the pattern of international migration, the rate of unemployment in the host country, and the income of workers in the two economies.

Suggested Citation

  • Djajic, Slobodan, 1985. "Minimum Wage, Unemployment and International Migration," Queen's Institute for Economic Research Discussion Papers 275201, Queen's University - Department of Economics.
    • Handle: RePEc:ags:queddp:275201
    DOI: 10.22004/ag.econ.275201
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    References listed on IDEAS

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    Cited by:

    1. Agiomirgianakis, George M., 1998. "Monetary Policy Games and International Migration of Labor in Interdependent Economies," Journal of Macroeconomics, Elsevier, vol. 20(2), pages 243-266, April.

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