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Global Wage Inequality and the International Flow of Migrants

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  • Rosenzweig, Mark R.

Abstract

A framework for understanding the determinants in the variation in the pricing of skills across countries and the model underlying the Mincer specification of wages that is used widely to estimate the relationship between schooling and wages are described. A method for identifying skill prices and for testing the Mincer model, using wages and the human capital attributes of workers located around the world, is discussed. A global wage equation that nests the Mincer specification is estimated that provides skill price estimates for 140 countries. The estimates reject the Mincer model. The skill price estimates indicate that variation in skill prices dominates the cross-country variation in schooling levels or rates of return to schooling in accounting for the global inequality in the earnings of workers worldwide. Variation in skill prices and GDP across countries has opposite and significant effects on the number and quality of migrants to the United States.

Suggested Citation

  • Rosenzweig, Mark R., 2010. "Global Wage Inequality and the International Flow of Migrants," Center Discussion Papers 56757, Yale University, Economic Growth Center.
    • Handle: RePEc:ags:yaleeg:56757
    DOI: 10.22004/ag.econ.56757
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    References listed on IDEAS

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    1. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66(4), pages 281-281.
    2. Richard B. Freeman & Remco H. Oostendorp, 2002. "Wages Around the World: Pay across Occupations and Countries," International Economic Association Series, in: Richard B. Freeman (ed.), Inequality Around the World, chapter 2, pages 5-37, Palgrave Macmillan.
    3. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
    4. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-563, July.
    5. Guillermina Jasso & Douglas Massey & Mark Rosenzweig & James Smith, 2000. "The new immigrant survey pilot (NIS-P): Overview and new findings about U.S. Legal immigrants at admission," Demography, Springer;Population Association of America (PAA), vol. 37(1), pages 127-138, February.
    6. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, vol. 64(1), pages 275-289, February.
    7. Jasso, Guillermina & Rosenzweig, Mark R., 2008. "Selection Criteria and the Skill Composition of Immigrants: A Comparative Analysis of Australian and U.S. Employment Immigration," IZA Discussion Papers 3564, IZA Network @ LISER.
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    Cited by:

    1. Rodrik, Dani, 2017. "Is Global Equality the Enemy of National Equality?," Working Paper Series rwp17-003, Harvard University, John F. Kennedy School of Government.
    2. Pritchett, Lant, 2024. "Investing in Human Capital in Africa: A framework for research," International Journal of Educational Development, Elsevier, vol. 107(C).
    3. Harald Fadinger & Karin Mayr, 2014. "Skill-Biased Technological Change, Unemployment, And Brain Drain," Journal of the European Economic Association, European Economic Association, vol. 12(2), pages 397-431, April.
    4. Orley Ashenfelter, 2012. "Comparing Real Wage Rates: Presidential Address," American Economic Review, American Economic Association, vol. 102(2), pages 617-642, April.
    5. Dmytro Vikhrov, 2017. "Immigration policy index," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 25(1), pages 3-46, January.
    6. Steven Kennedy & Michael P. Kidd & James Ted McDonald & Nicholas Biddle, 2015. "The Healthy Immigrant Effect: Patterns and Evidence from Four Countries," Journal of International Migration and Integration, Springer, vol. 16(2), pages 317-332, May.
    7. Ashenfelter, Orley, 2012. "Comparing Real Wage Rates," IZA Discussion Papers 6500, IZA Network @ LISER.
    8. Lutz Hendricks & Todd Schoellman, 2018. "Human Capital and Development Accounting: New Evidence from Wage Gains at Migration," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(2), pages 665-700.
    9. repec:pri:indrel:dsp01t435gd01h is not listed on IDEAS
    10. Michael A. Clemens & Claudio Montenegro & Lant Pritchett, 2016. "Bounding the Price Equivalent of Migration Barriers," Growth Lab Working Papers 67, Harvard's Growth Lab.
    11. Ro, Annie & Fleischer, Nancy L. & Blebu, Bridgette, 2016. "An examination of health selection among U.S. immigrants using multi-national data," Social Science & Medicine, Elsevier, vol. 158(C), pages 114-121.
    12. Dozie Okoye, 2016. "Appropriate Technology And Income Differences," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(3), pages 955-996, August.
    13. Brauw, Alan de, 2015. "Migration, Youth, and Agricultural Productivity in Ethiopia," 2015 Allied Social Sciences Association (ASSA) Annual Meeting, January 3-5, 2015, Boston, Massachusetts 189684, Agricultural and Applied Economics Association.

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    Keywords

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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