International migration and real wages: Is there any neo-classical ambiguity?

doi:10.1016/0304-3878(89)90036-9

Journal of Development Economics

Volume 31, Issue 1, July 1989, Pages 177-183

https://doi.org/10.1016/0304-3878(89)90036-9 Get rights and content

Abstract

Recent research has shown that while labor emigration increases the nominal wage rate, the impact on the real wage rate remains quite ambiguous. The present paper reexamines the issue under the standard two-factor, two-commodity international trade model normally employed for this purpose. The principal finding of this paper is that once the problem is correctly formulated and analyzed, introducing utility-maximizing consumers, no such ambiguity exists. Indeed, labor emigration always leads to an increase in the welfare (real wage) of labor in the source country.

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Journal of Development Economics
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International migration, non-traded goods and economic welfare in a two-class economy: A reply
Journal of Development Economics
(1984)
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Protection and real wages: The neoclassical ambiguity
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There are more references available in the full text version of this article.

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^∗: I am deeply indebted to Henry Thompson who provided many helpful suggestions and constructive comments on an earlier version. Also, gratefully acknowledged is the help and encouragement of Malcolm Dowling. Evelyn Gelano provided valuable assistance in the preparation of the paper. The opinions expressed in the paper are personal and not of the Asian Development Bank.

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International migration and real wages: Is there any neo-classical ambiguity?

Abstract

Journal of Development Economics

Journal of Development Economics

Journal of Economic Theory