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International Migration Of Skilled And Unskilled Labour, Welfare And Skilled-Unskilled Wage Inequality: A Simple Model

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Author Info
Sarbajit Chaudhuri (Dept. of Economics, Calcutta University, India)

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Abstract

The paper shows that in a reasonable production structure for a developing economy a brain drain of skilled labour may raise the welfare of the economy while an emigration of unskilled labour is welfare reducing. Also an emigration of skilled / unskilled labour lowers the urban unemployment of unskilled labour and widens the skilled-unskilled wage-gap. The paper provides an alternative explanation for the increasing wage inequality in many less developed countries in the regime of liberalized trade and investment in terms of higher international mobility of skilled and unskilled labour during this period using a Harris-Todaro (1970) framework where the central principle of the Stolper-Samuelson theorem holds.

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File URL: http://129.3.20.41/eps/it/papers/0510/0510011.pdf
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Publisher Info
Paper provided by EconWPA in its series International Trade with number 0510011.

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Length: 14 pages
Date of creation: 23 Oct 2005
Date of revision:
Handle: RePEc:wpa:wuwpit:0510011

Note: Type of Document - pdf; pages: 14
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Web page: http://129.3.20.41

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Related research
Keywords: Skilled labour Unskilled labour Emigration of labour Welfare Urban unemployment Skilled-unskilled wage gap

Find related papers by JEL classification:
F2 - International Economics - - International Factor Movements and International Business
F20 - International Economics - - International Factor Movements and International Business - - - General
F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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References listed on IDEAS
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  1. Feenstra, R.C. & Hanson, G.H., 1995. "Foreign Investment, Outsourcing and Relative Wages," Department of Economics 95-14, California Davis - Department of Economics.
    Other versions:
  2. Bhagwati, Jagdish & Rodriguez, Carlos, 1975. "Welfare-theoretical analyses of the brain drain," Journal of Development Economics, Elsevier, vol. 2(3), pages 195-221, September. [Downloadable!] (restricted)
    Other versions:
  3. Ann Harrison & Gordon Hanson, 1999. "Who Gains from Trade Reform? Some Remaining Puzzles," NBER Working Papers 6915, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Wood, Adrian, 1997. "Openness and Wage Inequality in Developing Countries: The Latin American Challenge to East Asian Conventional Wisdom," World Bank Economic Review, Oxford University Press, vol. 11(1), pages 33-57, January.
  5. Rivera-Batiz, Francisco L., 1982. "International migration, non-traded goods and economic welfare in the source country," Journal of Development Economics, Elsevier, vol. 11(1), pages 81-90, August. [Downloadable!] (restricted)
  6. Quibria, M. G., 1988. "A note on international migration, non-traded goods and economic welfare in the source country," Journal of Development Economics, Elsevier, vol. 28(3), pages 377-387, May. [Downloadable!] (restricted)
  7. Rodriguez, Carlos Alfredo, 1975. "On the Welfare Aspects of International Migration," Journal of Political Economy, University of Chicago Press, vol. 83(5), pages 1065-72, October. [Downloadable!] (restricted)
  8. Wood, Adrian, 1995. "How Trade Hurt Unskilled Workers," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 57-80, Summer. [Downloadable!] (restricted)
  9. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May. [Downloadable!] (restricted)
    Other versions:
  10. Winters, L Alan, 2000. "Trade, Trade Policy and Poverty: What Are The Links?," CEPR Discussion Papers 2382, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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