The present paper makes an attempt to examine theoretically the impact of emigration of skilled labour from developing countries on the level of welfare of the non-migrants and the level of urban unemployment of unskilled labour in a three sector Harris-Todaro model. The analysis suggests that in a reasonable production structure for a developing economy a brain drain of skilled labour raises urban unemployment of unskilled labour. The paper also shows that an emigration of skilled labour may raise the welfare of the non-migrants in a tariff-distorted economy if it imports the specialized manufacturing product or the labour-intensive good. However, if the economy imports the traditional manufacturing product, the welfare of the non-emigrating workers is likely to deteriorate.
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Paper provided by EconWPA in its series International Trade with number
0511007.
Find related papers by JEL classification: F2 - International Economics - - International Factor Movements and International Business F - International Economics F22 - International Economics - - International Factor Movements and International Business - - - International Migration J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
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