How does labor mobility affect income convergence?

Jordan Rappaport

No 99-12, Research Working Paper from Federal Reserve Bank of Kansas City

Abstract: The neoclassical growth model is extended to allow for mobile labor. Following a negative shock to a small economy's capital stock, capital and labor frictions effect an equilibrium transition path during which wages remain below their steady-state level. Outmigration directly contributes to faster income convergence but also creates a disincentive for gross capital formation. The net result is that across a wide range of calibrations, the speed of income convergence is relatively insensitive to the degree of labor mobility.

Keywords: Labor mobility; Emigration and immigration; Income (search for similar items in EconPapers)
Date: 1999
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: How does labor mobility affect income convergence? (2005)
Working Paper: How Does Labor Mobility Affect Income Convergence? (2000)
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