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

  • Sarbajit Chaudhuri

    (Dept. of Economics, Calcutta University, India)

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://128.118.178.162/eps/it/papers/0510/0510011.pdf
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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
Contact details of provider: Web page: http://128.118.178.162

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  1. 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.
  2. Ann Harrison & Gordon Hanson, 1999. "Who Gains from Trade Reform? Some Remaining Puzzles," NBER Working Papers 6915, National Bureau of Economic Research, Inc.
  3. Robert C. Feenstra & Gordon H. Hanson, 1995. "Foreign Direct Investment and Relative Wages: Evidence from Mexico's Maquiladoras," NBER Working Papers 5122, National Bureau of Economic Research, Inc.
  4. Gordon H. Hanson & Ann Harrison, 1999. "Trade liberalization and wage inequality in Mexico," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(2), pages 271-288, January.
  5. 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.
  6. J. N. Bhagwati & C. Rodriguez, 1975. "Welfare-Theoretical Analysis of the Brain Drain," Working papers 158, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. 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.
  8. Winters, L. Alan, 2000. "Trade, Trade Policy and Poverty: What Are The Links?," CEPR Discussion Papers 2382, C.E.P.R. Discussion Papers.
  9. Feenstra, R.C. & Hanson, G.H., 1995. "Foreign Investment, Outsourcing and Relative Wages," Department of Economics 95-14, California Davis - Department of Economics.
  10. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-42, March.
  11. Adrian Wood, 1995. "How Trade Hurt Unskilled Workers," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 57-80, Summer.
  12. Wood, Adrian, 1997. "Openness and Wage Inequality in Developing Countries: The Latin American Challenge to East Asian Conventional Wisdom," World Bank Economic Review, World Bank Group, vol. 11(1), pages 33-57, January.
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