Inflow Of Labor Research Articles

Demographic Dimensions of China's Development

From time immemorial, China has been most populous country in world. The rise of China after 1949 was a political event and since 1980 also an economic event. Neither one had much to do with growth of its popu lation. If country's present below-replacement fertility continues, its popu lation of 1.29 billion in 2005 (exclusive of 7 million people in Hongkong and Macao and 23 million people in Taiwan) may reach a maximum of about 1.4 billion around 2030 and decline thereafter. By 2050 China's share of population is likely to have dropped from 21 percent to 15 percent. Yet China looms large in pessimistic projections of resource shortages and atmospheric pollution, in part, no doubt, because its (and India's) rapid economic growth threatens dominant position of West?a contem porary version of Yellow Peril. Owing to continuous inflow of cheap semi-skilled labor from rural areas and its millions of university graduates, China has become the factory of world with help of foreign com panies and to benefit of Western consumers. Why has export-led growth worked so well for China? The answer lies partly in its social institutions, universal primary education, global reduction of trade barriers since 1990s, and priority placed on economic improvement. In spite of its huge size, growing differences in economic development between coastal and interior areas, a persistent rural-urban income gap, and low level of urbanization, many of China's demographic characteristics and tendencies are rather uniform throughout country. The general pat terns are universal marriage, nuclear households, preference for sons, fer tility decline, reduced infant mortality, and rising life expectancy, traits that hold also among most non-Han ethnic minorities. While some of these char acteristics should be attributed to a rapid improvement in living standards over past 25 years, three factors appear to be mainly responsible: cul tural homogeneity, key socioeconomic role of family, and forceful government intervention?most notably through one-child policy. Cul tural homogeneity is preserved by vast masses of China's society, in

Foreign Capital, Skill Formation, and Migration of Skilled Workers

We study the interaction between foreign capital inflow and international migration of skilled labor when a small open economy is subject to exogenous shocks. The presence of a skill formation sector is central to our analysis, such that import liberalization and increased foreign capital inflow may lead to increased skill emigration both in absolute terms and as percentage of gross skill formation. Furthermore, a positive product price shock for the sector that uses foreign capital may turn out to be immiserizing. Finally, growth in the agricultural sector can lower the rate of skill formation as well as skill emigration.

On the Economic Impact of Foreign Labor Inflows in Korea

On the Economic Impact of Foreign Labor Inflows in Korea

International Labour Migration in East Asia: trends, patterns and policy issues

This paper examines emerging patterns of labour migration in East Asia and related policy issues from the perspective of labour‐importing countries. Following a survey of the characteristics of labour flows stemming from, but more importantly occurring within, the region, it probes inter‐country differences, both in the timing of the entry of migrant workers and the degree of dependency on migrant labour in the context of rapid economic growth and labour market change. There is clear evidence that labour migration is now a structural feature of the economic landscape in these countries. The policy challenge is to design market‐based systems for making the new reliance on labour inflows consistent with changing domestic labour market conditions and the priorities of national development policy, while minimising social resentment and adverse implications for political relations with neighbouring labour‐sending countries.

Illegal Immigration and Second-best Import Tariffs

A version of the small-union Meade model is presented to analyze the illegal immigration problem in the context of import tariffs. Two possible host nation objectives are considered: (i) to control the level of illegal immigration to a given target; or (ii) to choose an illegal immigration level that maximizes national welfare. Available policy instruments are import tariffs/subsidies, border, and internal enforcement levels. The second-best tariff on imports from the source nation (for illegal immigration) can be of either sign. It depends on the effect of the tariff on the wage rate and the pattern of substitutability in consumption. In scenario (ii), greater enforcement may be justified if it reduces labor inflow and thereby contracts the protected sector. If enforcement is too costly, tariff policy may substitute for it to exploit monopsony power in the labor market and to counter the distortionary effects of labor flows.

Causes of Changes in Agricultural Employment in Slovenia: Evidence from Micro‐data

AbstractThis paper analyses labour adjustment in and out of agriculture during transition to a market economy. A multinomial logit model is used to determine the factors that affect these processes. The results show that elderly, less educated and full‐time employees on a farm are more likely to continue with farming. Inflow of labour into agriculture is largely associated with the unemployment and retirement of farm household members. Age, education and investment in human capital are the key factors that improve the quality, mobility and flexibility of labour, which is crucial for efficient labour adjustment at the micro‐level and sector level. Better‐educated individuals are more likely to enter into employment in non‐agricultural, particularly service, activities.

Skilled Emigration, Business Networks and Foreign Direct Investment

In a global context foreign direct investment (FDI) and migration substitute one another in the matching process between workers and firms. However, as labor flows can lead to the formation of business networks, migration can actually facilitate FDI in the long-run. We first present a stylized model for a small open economy illustrating these offsetting effects. We then use U.S. data on bilateral labor inflows and capital outflows to measure the extent of contemporaneous substitutability and dynamic complementarity between migration and FDI. We find that brain drain and FDI inflows are negatively correlated contemporaneously but that skilled migration is associated with future increases in FDI inflows. We also find suggestive evidence of substitutability between current migration and FDI for migrants with secondary education, and of complementarity between past migration and FDI for unskilled migrants. Keywords; brain drain, foreign direct investment inflows, migrant ties and business networks

International Factor Mobility, Government Size and Welfare

An examination of the available data reveals that the size of government varies considerably across time and countries. By making use of a simple general equilibrium model, this paper demonstrates that size of government is affected by the availability of capital and labour within an economy. Specifically, this paper utilises a model of a closed economy that produces one‐private and one‐public good. Both goods are produced by means of capital and labour. Production functions are subject to constant returns to scale and perfect competition prevails in all markets. The elasticity of substitution between the public and the private good is greater than unity and there is no international factor mobility in the initial equilibrium. The size of government is measured by total spending on the public good as a proportion of the total expenditure on the private and public goods. It is shown that capital (labour) inflow can decrease (increase) the size of government. Capital inflow increases welfare if the private good is relatively capital intensive whereas labour inflow increases welfare if the public good is relatively capital intensive.

The Atlantic Slave Trade

The Atlantic Slave Trade

Prospects for international migration: Globalization and its discontents

The paper challenges the view that the late twentieth century is the ‘age of migration’. For developing countries, flows of out-migrants are small compared with population growth, although in developed countries the stock of immigrants increased in proportion to the total population between 1965 and 1990. Despite the importance of refugee movement, the main force for international migration is economic. Why do not more people migrate (internally and internationally) to take advantage of potential economic gains? For international migration, one deterrent is institutional barriers against uncontrolled immigration. Different interest groups stand to gain or lose from increased migration. The income-enhancing effects of unhindered international labour migration, measured jointly for sending and receiving countries and by extension globally, should be very large. Even partial liberalization of immigration to industrialized countries would serve developing countries well. In industrialized countries, however, there is concern about the effect of massive labour inflows on the ethnic, religious and cultural composition of the population and its social cohesion. In some countries, migration is leading to greater ethnic mingling; in others there is a recrudescence of nationalistic aspirations for independent statehood with ethnically homogeneous populations, or to preserve the advantages of economically successful subregions.

Commercial policy and international factor mobility in the presence of monopolistic competition

This paper utilizes a well-known specification of returns to specialization (a variation of the Spence-Dixit-Stiglitz model) to explore the implications of local agglomeration effects for commercial policy and restricted factor mobility. The paper initially considers a small open economy where it is shown that a tariff reduces the degree of specialization and hence the size of the external economies to the producers. An inflow of labor increases the degree of specialization while a capital inflow decreases it. The paper then considers a two-country world where both countries are large and deals with the pattern of trade and factor mobility.

Efficiency wages, unemployment and international factor movements

This paper examines the implications of unemployment resulting from efficiency wages for international factor movements in a standard Heckscher-Ohlin model where the relative size of the endowments of skilled and unskilled workers and the efficiency wage induced unemployment level in the unskilled labour market are simultaneously determined given the population, supply of capital and its distribution in the economy. Capital in the economy is used only to train individuals for the skilled labour market, where workers are fully employed. It is shown that the optimum labour inflow in the market with domestic distortion and the optimum capital inflow are always positive because they reduce the severity of distortion by raising employment and income for the residents. The income and employment of foreigners also increase. Under this situation the optimum labour or capital outflow on the other hand is always zero. These conclusions directly contradict the result obtained for international factor movements in the presence of exogenously determined unemployment.

The Effects of Economic Integration Between North and South Korea: A Computable General Equilibrium Analysis

This paper investigates the potential impact of economic integration between North and South Korea on the economy of South Korea. A nine-sector, trade-focused, computable general equilibrium (CGE) model is constructed. The model is used to quantify the likely consequences of various forms of economic integration between the two Koreas. The simulation results indicate that unless factor movement (labor inflow from the North, and capital outflow to the same) are considered, any preferential trading system between the two Koreas has an inconsequential impact (positive or negative, aggregate or sectoral) from the viewpoint of the south. Much greater effects, however, follow from factor movements. [C68, D68, F13, F15]

Peopling the Pampa: On the Impact of Mass Migration to the River Plate, 1870–1914

The Argentine economy was transformed in the late nineteenth century by the mass migration of millions of Europeans. Various ideas have surfaced concerning the likely impact of this labor inflow: that it favored the wheat revolution on the pampa; that it promoted urbanization and the rapid growth of Buenos Aires; that it paved the way for Argentine industrialization; that it caused slack in the labor markets, lowering wages. This paper attempts an analysis of the impact of migration on the scale and structure of the Argentine economy and tries to resolve various competing hypotheses. The paper presents a new social accounting matrix (SAM) for Argentina and uses it to calibrate a CGE model. My results suggest that immigration enhanced Argentina's comparative advantage as a cereal producer and exporter, encouraged extensive growth on the pampa, and markedly lowered real wages.

Fiscal Balance During Inflation, Disinflation, and Immigration: Policy Lessons

The paper provides an overview of the role of the fiscal imbalances and the ensuing public debt in explaining major episodes in Israel’s recent economic developments. The main conclusions from the Israeli budgetary developments may have more general validity: (a) deficits lead to inflation and stopping inflation requires elimination of deficits; (b) a major effect of inflation is a large shift of the tax burden from capital to labor; and (c) shocks to labor supply, such as massive labor inflow through immigration, can be absorbed without worsening government finances, when the labor and the housing markets are sufficiently flexible.

Fiscal Balance During Inflation, Disinflation, and Immigration: Policy Lessons

The paper provides an overview of the role of the fiscal imbalances and the ensuing public debt in explaining major episodes in Israel`s recent economic developments. The main conclusions from the Israeli budgetary developments may have more general validity: (a) deficits lead to inflation and stopping inflation requires elimination of deficits; (b) a major effect of inflation is a large shift of the tax burden from capital to labor; and (c) shocks to labor supply, such as massive labor inflow through immigration, can be absorbed without worsening government finances, when the labor and the housing markets are sufficiently flexible.

Minimum Wage, International Migration And Their Effects On Welfare

This paper evaluates migration policies for an open economy in the presence of unemployment resulting from a minimum wage. Migration between countries is triggered by an expected wage differential which depends both on the market wage and the level of unemployment. Workers therefore can move in either direction. The paper shows that labor outflow raises employment and welfare. Distortion-ridden free trade with this out-migration is therefore better than distortion-ridden free trade with no migration. It might also be better than autarky. Under the scenario, free migration is an alternative to restricted trade often recommended to deal with this type of distortion. Labor inflow on the other hand generates unfavorable terms of trade, raises national and global unemployment, and reduces welfare. [F 2]

MINIMUM WAGE, INTERNATIONAL MIGRATION AND THEIR EFFECTS ON WELFARE

This paper evaluates migration policies for an open economy in the presence of unemployment resulting from a minimum wage. Migration between countries is triggered by an expected wage differential which depends both on the market wage and the level of unemployment. Workers therefore can move in either direction. The paper shows that labor outflow raises employment and welfare. Distortion-ridden free trade with this out-migration is therefore better than distortion-ridden free trade with no migration. It might also be better than autarky. Under the scenario, free migration is an alternative to restricted trade often recommended to deal with this type of distortion. Labor inflow on the other hand generates unfavorable terms of trade, raises national and global unemployment, and reduces welfare. [F 2]

Argentina’s Failed General Strike of 1921: A Critical Moment in the Radicals’ Relations with Unions

I N the years immediately after 1917, labor activism in Argentina expanded exponentially. This should not be surprising; almost everywhere in the Western world in the wake of World War I and the Bolshevik Revolution, strike rates increased greatly. The old barriers appeared to fall. The war itself brought changes to the European nations that at first seemed profound. The Russian Revolution sent a message to workers around the world that revolution was possible, and turmoil temporarily gripped much of Europe.' That a distant upheaval should have a profound impact on Argentina is also not surprising. While Argentina remained neutral and was spared total war, the conflict changed the nation. The torrent of immigration largely ceased, and even reversed between 1914 and 1918, producing a different labor market than that which had existed previously. Immigrants had lived for some time in Argentina and had adjusted to their new world, and no constant inflow of surplus labor existed. Only in 1920-21 did immigration significantly increase, and not until iz922 did it reach anything like prewar levels.2 The initial war years brought severe economic depression, prompted by shifting demands for exports and difficulties in importing

A general model of policies toward international flows of capital and labour

Several studies in the literature on the theory of international trade and factor flows have focused on the interrelations between the policies of a country toward international flows of labour and capital. For instance, a seminal note of Ramaswami raised the issue of whether a country's policy should discourage outflow of capital and encourage inflow of labour or vice versa. This and other related issues and results are reexamined in the present study in a more general setting where specialization in different commodities and variable terms of trade are allowed.