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Unemployment of Unskilled Labor due to COVID-19 led Restriction on Migration and Trade

Author

Listed:
  • Mandal, Biswajit
  • Chaudhuri, Saswati
  • Prasad, Alaka Shree

Abstract

To combat COVID-19 the entire world has resorted to global lockdown implying restriction on international labor migration and trade. This paper aims to check the effect of such restrictions on the unemployment of unskilled labor in the source country. In competitive general equilibrium framework with three goods and four factors restriction on migration raises unemployment for given factor intensity. The results remain same even in a slightly different structure of the economy. In case of trade restriction, however, the rise or fall in unemployment depends on both the structure of the economy and the factor intensity assumption.

Suggested Citation

  • Mandal, Biswajit & Chaudhuri, Saswati & Prasad, Alaka Shree, 2020. "Unemployment of Unskilled Labor due to COVID-19 led Restriction on Migration and Trade," GLO Discussion Paper Series 614, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:614
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    File URL: https://www.econstor.eu/bitstream/10419/222450/1/GLO-DP-0614.pdf
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    References listed on IDEAS

    as
    1. Gouranga Gopal Das & Sugata Marjit, 2018. "Skill, Innovation and Wage Inequality: Can Immigrants be the Trump Card?," CESifo Working Paper Series 7082, CESifo.
    2. Mayda, Anna Maria & Ortega, Francesc & Peri, Giovanni & Shih, Kevin & Sparber, Chad, 2018. "The effect of the H-1B quota on the employment and selection of foreign-born labor," European Economic Review, Elsevier, vol. 108(C), pages 105-128.
    3. Marjit, Sugata & Kar, Saibal, 2011. "The Outsiders: Economic Reform and Informal Labour in a Developing Economy," OUP Catalogue, Oxford University Press, number 9780198071495, April.
    4. Acharyya, Rajat & Kar, Saibal, 2014. "International Trade and Economic Development," OUP Catalogue, Oxford University Press, number 9780199672851, April.
    5. Sarbajit Chaudhuri & Ujjaini Mukhopadhyay, 2010. "Revisiting the Informal Sector," Springer Books, Springer, number 978-1-4419-1194-0, September.
    6. Ronald W. Jones, 1965. "The Structure of Simple General Equilibrium Models," Journal of Political Economy, University of Chicago Press, vol. 73, pages 557-557.
    7. Pierre-Richard Agénor & Peter J. Montiel, 2015. "Development Macroeconomics Fourth edition," Economics Books, Princeton University Press, edition 4, number 10494.
    8. Biswajit Mandal & Arindam Mandal, 2015. "A Note on How and Why Growth and Unemployment Go Hand in Hand in Developing Economies," International Economic Journal, Taylor & Francis Journals, vol. 29(4), pages 681-693, December.
    9. Sarbajit Chaudhuri, 2019. "Anti‐immigration policy in the destination country and skilled–unskilled wage inequality in a source economy with or without unemployment," Economics and Politics, Wiley Blackwell, vol. 31(3), pages 465-484, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    General Equilibrium; COVID-19; Migration; Trade; Unemployment;
    All these keywords.

    JEL classification:

    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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