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Is a Policy of Free Movement of Workers Sustainable?

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  • Picard, Pierre M.

    (University of Luxembourg)

  • Worrall, Tim

    (University of Edinburgh)

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.

Suggested Citation

  • Picard, Pierre M. & Worrall, Tim, 2014. "Is a Policy of Free Movement of Workers Sustainable?," IZA Discussion Papers 8035, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8035
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    References listed on IDEAS

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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

    Keywords

    labor market flexibility; migration; sustainable plan;
    All these keywords.

    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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