INTERNATIONAL MIGRATION OF SKILLED AND UNSKILLED LABOUR, WELFARE AND SKILLED-UNSKILLED WAGE INEQUALITY: A SIMPLE MODEL

Sarbajit Chaudhuri ()

International Trade from EconWPA

Abstract: 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.

Keywords: Skilled labour; Unskilled labour; Emigration of labour; Welfare; Urban unemployment; Skilled-unskilled wage gap (search for similar items in EconPapers)
JEL-codes: F2 F20 F22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab
Date: 2005-10-23
Note: Type of Document - pdf; pages: 14
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