Abstract
The paper fabricates endogenous skill formation in a two-sector general equilibrium model where the unemployment of the skilled workers is caused by efficiency wage. The paper also examines the effects of the immigration of unskilled labor, the emigration of skilled labor, and the inflow of foreign capital on unemployment, skilled-unskilled wage inequality, and the level of skill formation in each unskilled working family. We find that the immigration of unskilled labor raises both the rate and level of unemployment of the skilled labor and lowers both the relative skilled-unskilled wage inequality and the level of skill formation in each unskilled working family under certain conditions. However, the emigration of skilled labor or the inflow of foreign capital gives opposite results.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
