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Can International Factor Mobility lessen Wage Inequality in a Dual Economy?

Author

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  • Beladi, Hamid
  • Chaudhuri, Sarbajit
  • Yabuuchi, Shigemi

Abstract

We introduce international labor mobility in a three-sector general equilibrium model with rural-urban migration. We demonstrate that under some reasonable conditions an inflow of foreign skilled labor (capital) can reduce skilled-unskilled wage inequality.

Suggested Citation

  • Beladi, Hamid & Chaudhuri, Sarbajit & Yabuuchi, Shigemi, 2007. "Can International Factor Mobility lessen Wage Inequality in a Dual Economy?," MPRA Paper 2641, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:2641
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    References listed on IDEAS

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    1. Chaudhuri, Sarbajit, 2007. "Foreign capital, welfare and urban unemployment in the presence of agricultural dualism," Japan and the World Economy, Elsevier, vol. 19(2), pages 149-165, March.
    2. Wood, Adrian, 1997. "Openness and Wage Inequality in Developing Countries: The Latin American Challenge to East Asian Conventional Wisdom," The World Bank Economic Review, World Bank, vol. 11(1), pages 33-57, January.
    3. Bhalotra, Sonia., 2003. "The impact of economic liberalization on employment and wages in India," ILO Working Papers 993650543402676, International Labour Organization.
    4. Corden, W M & Findlay, Ronald, 1975. "Urban Unemployment, Intersectoral Capital Mobility and Development Policy," Economica, London School of Economics and Political Science, vol. 42(165), pages 59-78, February.
    5. Yabuuchi, Shigemi & Chaudhuri, Sarbajit, 2007. "International migration of labour and skilled-unskilled wage inequality in a developing economy," Economic Modelling, Elsevier, vol. 24(1), pages 128-137, January.
    6. Robert C. Feenstra & Gordon H. Hanson, 1995. "Foreign Investment, Outsourcing and Relative Wages," NBER Working Papers 5121, National Bureau of Economic Research, Inc.
    7. Sugata Marjit & Hamid Beladi & Avik Chakrabarti, 2004. "Trade and Wage Inequality in Developing Countries," Economic Inquiry, Western Economic Association International, vol. 42(2), pages 295-303, April.
    8. Chaudhuri, Sarbajit & Yabuuchi, Shigemi, 2007. "Economic liberalization and wage inequality in the presence of labour market imperfection," International Review of Economics & Finance, Elsevier, vol. 16(4), pages 592-603.
    9. Robbins, Donald J., 1996. "Hos Hits Facts: Facts Win Evidence On Trade And Wages In The Developing World," Harvard Institute for International Development (HIID) Papers 294374, Harvard University, Kennedy School of Government.
    10. Azizur Rahman Khan, 1998. "The Impact of Globalization on South Asia," Palgrave Macmillan Books, in: A. S. Bhalla (ed.), Globalization, Growth and Marginalization, chapter 4, pages 103-124, Palgrave Macmillan.
    11. Shigemi Yabuuchi, 2007. "Unemployment and International Factor Movement in the Presence of Skilled and Unskilled Labor," Review of Development Economics, Wiley Blackwell, vol. 11(3), pages 437-449, August.
    12. Marjit, Sugata & Kar, Saibal, 2005. "Emigration and wage inequality," Economics Letters, Elsevier, vol. 88(1), pages 141-145, July.
    13. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    14. Donald J. Robbins, 1996. "Evidence on Trade and Wages in the Developing World," OECD Development Centre Working Papers 119, OECD Publishing.
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    Cited by:

    1. Chaudhuri, Sarbajit & Banerjee, Dibyendu, 2008. "Fair Wage Hypothesis, International Factor Mobility and Skilled-Unskilled Wage Inequality in a Developing Economy," MPRA Paper 9303, University Library of Munich, Germany.
    2. Chaudhuri, Sarbajit, 2008. "Fair Wage Hypothesis, Foreign Capital Inflow and Skilled-unskilled Wage Inequality in the Presence of Agricultural Dualism," MPRA Paper 9394, University Library of Munich, Germany.
    3. Ujjaini Mukhopadhyay, 2017. "Foreign Capital Inflow and Skill Formation: Effects on Skilled-unskilled Wage Inequality," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 42(4), pages 119-136, December.

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    More about this item

    Keywords

    Skilled-unskilled wage inequality; rural-urban migration; Unemployment; International factor movements;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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