Labor Mobility, Trade and Social Capital

Maurice Schiff

No 1027, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Labor market integration raises welfare in the absence of distortions. This paper examines labor and goods market integration in a general equilibrium model with social capital. The findings are: i) labor market integration has an ambiguous impact on welfare, and raises it if the goods produced and the labor skills are sufficiently different; ii) compared to Pareto optimum, labor mobility (social capital) is excessively large (depleted); iii) trade is superior to labor market integration if trading costs are no higher than private migration costs; otherwise the outcome is ambiguous; and iv) the creation of new institutions in response to labor market integration has an ambiguous impact on welfare.

Keywords: trade; social capital; labor market integration (search for similar items in EconPapers)
JEL-codes: F16 F22 J61 Z13 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2004-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published - published in: Review of International Economics, 2004, 12 (4), 630-642

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Journal Article: Labor Mobility, Trade, and Social Capital (2004)
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