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Is a policy of free movement of workers sustainable?

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  • Pierre M. PICARD
  • Tim WORRALL

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.
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Suggested Citation

  • Pierre M. PICARD & Tim WORRALL, 2016. "Is a policy of free movement of workers sustainable?," CORE Discussion Papers RP 2817, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvrp:2817
    Note: In : Scandinavian Journal of Economics, 118(4), 718-754, 2016
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    References listed on IDEAS

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    1. Jonathan Thomas & Tim Worrall, 1988. "Self-Enforcing Wage Contracts," Review of Economic Studies, Oxford University Press, vol. 55(4), pages 541-554.
    2. Grossman, Gene M & Helpman, Elhanan, 1995. "The Politics of Free-Trade Agreements," American Economic Review, American Economic Association, vol. 85(4), pages 667-690, September.
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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.

    More about this item

    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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