Labor Mobility, Trade and Social Capital
AbstractLabor 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 produced and the 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.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1027.
Length: 27 pages
Date of creation: Feb 2004
Date of revision:
Publication status: published in: Review of International Economics, 2004, 12 (4), 630-642
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Other versions of this item:
- 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; Social and Economic Stratification
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-03-07 (All new papers)
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