Productivity differences and the dynamic effects of labor movements

Paul Klein and Gustavo Ventura

Journal of Monetary Economics, 2009, vol. 56, issue 8, 1059-1073

Abstract: Barriers to labor mobility across countries coexist with substantial differences in living standards largely attributable to productivity differences. A growth model with endogenous labor movements is used to assess the effects on output, capital accumulation and welfare of removing barriers to labor mobility. The model is parameterized so that it is consistent with evidence on historical labor movements, and is applied to two cases: the enlargement of the European Union and the (hypothetical) creation of a common labor market in the North America. The main finding is that there are large resulting gains in terms of output and welfare.

Keywords: TFP; Cross-country; income; differences; Labor; mobility; Capital; mobility (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (102)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:56:y:2009:i:8:p:1059-1073

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