International Capital Mobility and Development Policy in a Dual Economy

This paper introduces international capital mobility in a general-equilibrium model of a small developing economy which is characterized by a dualistic economic structure. The model is then used to analyze the positive and the normative aspects of development policies that are often recommended for achieving employment-related objectives in developing economies.     

How Does Imperfect Competition in the Labor Market Affect Unemployment Policies?

We consider a continuum of workers ranked according to their abilities to acquire education and two firms with different technologies that imperfectly compete in wages to attract these workers. The education cost to be borne by workers is higher in the high-technology firm. In equilibrium, we show that the unemployed workers are those with the lowest initial abilities. We then study different policies that subsidize either education cost or wages. We found that the first-best allocation can only be implemented by selective policies. We analyze second-best nonselective policies and show that, in terms of welfare, subsidizing education costs or wages is strictly equivalent.     

Imperfect Capital Mobility and Local Government Behaviour in a Two‐Period Economy

One clear result in the tax competition literature is that, when head taxes on immobile residents are available, the optimal capital tax rate for local government is zero. However, zero tax rate, when resident taxes are available, is incompatible with the phenomenon actually observed. In most countries, local governments use capital taxes as policy variables for choosing a nonzero tax rate. This paper presents a model of a two‐period economy with imperfect mobile capital to explain the behaviour of local government providing capital subsidies on capital. It further examines an equilibrium tax rate where local government’s objectives include Niskanen‐type revenue‐maximizing.     

Migration Policy in a Small Open Economy with a Dual Labor Market

The paper uses a two–sector efficiency–wage model to analyze the consequences of immigration for a small open economy with a dual labor market. Immigrants are characterized by an (exogenous) return probability. Legal regulations impose preferential hiring of natives or "old" immigrants. As a result, there is sectoral segregation between natives and immigrants, leading to discrimination of the type equal pay for equal work,but unequal "work." In the short run (with sector–specific capital), immigration has a positive first–order impact on natives' welfare if migration policy favors segregation through high return rates or restrictive hiring practices ("guest–worker system"). In the long run, its effect is only determined by factor intensities (2 ¥ 2 model). Finally, the improved integration of migrants yields efficiency gains and improves aggregate welfare of all residents.     

Can International Factor Mobility Reduce Wage Inequality in a Dual Economy?*

This paper analyzes the consequences of international factor movements on the skilled–unskilled wage inequality in a dual‐economy set‐up that includes unemployment and three intersectorally mobile factors of production—unskilled labor, skilled labor, and capital. Thus far, theoretical literature on this subject has adopted the full‐employment framework and hence ignored the problem of unemployment. The analysis in this paper reveals that the results crucially depend on the difference in the intersectoral factor intensities between skilled labor and capital. In particular, it demonstrates the existence of a possibility of deterioration in wage inequality following foreign unskilled‐labor inflow.     

Dual Labor Markets And Strategic Efficiency Wage *

We consider a dual labor markets model in which the primary sector requires the presence of eMiciency wage, while the secondary sector is competitive. We show that the Solow condition does not hold in a Stackelberg equilibrium where the primary sector acts as a leader and the secondary one as a follower.[J41]     

Imperfect Competition, Capital Shortages and Unemployment Persistence

We construct a model integrating the traditions of imperfect competition macroeconomics and real business cycles. For this we study a dynamic economy with optimizing households, firms and trade unions subject to stochastic shocks. We can derive closed form solutions for the behaviour of all agents. It is found that the combination of capital shortages and imperfect competition in labor markets can give rise to unemployment, and that this unemployment is quite persistent, even when the underlying shocks are not.     

Immigration and Unemployment*

The wisdom of maintaining high levels of immigration into Australia has been questioned, particularly on the grounds that migration contributes to aggregate unemployment. This paper uses both statistical causality techniques and conventional structural models to investigate the relationship between immigration and unemployment in the post-war period in Australia. The tests find no evidence of any association from migration to unemployment, though there is strong evidence of a significant effect of Australian unemployment on migration. The results indicate that immigration policy should not be dictated by unfounded fears of immigration causing unemployment, at least over the range of previous Australian experience.     

分工、交易效率与城乡二元经济转化

交易效率是影响分工演进的决定性因素.交易效率的提升推动了分工的演进和城市的兴起.由于城市集聚经济和农村分散经济的不同特性,城乡经济之间交易效率和分工水平的不平衡是导致城乡二元经济结构产生的根本原因.理论分析和对来自中国各地区(1985-2008)的省级面板数据所进行的实证分析都表明,交易效率的提升对于促进城市化发展,推进城乡二元经济转化具有积极意义.交易效率的提升会使二元经济对立程度呈现出倒U型的发展趋势.随着交易效率的进一步提高,城乡二元经济结构将呈现出缓和态势.     

Training Systems and Labor Mobility: A Comparison between Germany and Sweden*

The mobility effect of general and specific training is a key issue in the debate on the design of educational systems. Using data from two retrospective life‐history surveys, we compare general school‐based vocational training and specific apprenticeship training with regard to inter‐firm, inter‐occupational and inter‐industrial mobility. The results show that workers with school‐based degrees display greater occupational mobility, while no difference in firm and industrial mobility can be discerned. This suggests that apprenticeships do not eliminate job search at labor market entry, that they reduce occupational mobility, and that responsiveness to structural change is similar under both training systems.     

Wages and Unemployment in Australia*

This paper reviews various models that may be used to analyze the inflation-unemployment problem in Australia. The focus is on the unemployment problem, rather than on inflation, and on the role of wages, nominal and real, in affecting this problem. Models discussed include the Popular Keynesian, Phillips Curve, Fixed Coefficient and Neoclassical Models. The possibility of increasing returns is considered. Australian evidence bearing on the appropriateness of these models is discussed. The effect of demand expansion on the exchange rate and hence real wages is stressed. Some emphasis is placed on the concept of ‘union-voluntary’ unemployment. At the end possible solutions to the unemployment problem are summarized.     

Privatization in a Small Open Economy with Imperfect Competition

We look at privatization in a general equilibrium model of a small, tariff‐distorted, open economy. There is a differentiated good produced by both private and public sector enterprises. A reduction in government production in order to cut losses from such production raises the returns to capital and increases the tariff revenue, which are welfare‐improving. However, privatization also leads to lower wages and possibly fewer private brands. This lowers workers’ welfare, which may make privatization politically infeasible. Privatization can improve workers’ welfare with complementary reforms, e.g., attracting foreign investment or trade liberalization.     

Urban Crime and Labor Mobility

Two municipalities within a metropolitan statistical area (MSA) determine the level of local law enforcement. Enforcement reduces and diverts crime. The former confers a spillover benefit; the latter a spillover cost. When labor is mobile, welfare necessarily declines: if enforcement is too high (low) under labor immobility, it is raised (reduced) further under mobility. If municipalities have different enforcement costs, mobility reduces welfare for the high‐cost municipality and for the MSA, but the effect is ambiguous on the low‐cost municipality. Finally, when residents choose between productive and criminal activities, enforcement is more likely to be overprovided.     

工人离职、失业波动与失业保险文献评述

失业不仅涉及失业波动的影响,还包括在职工人的离队。为减少工人搜寻过程中产生的负外部性,应降低工人的信息成本。失业保险政策的实施又降低了失业工人再就业的激励性,应确立有效的失业保险水平,实现产出与社会福利的最大化。     

Inflation and Unemployment in General Equilibrium*

When labor is indivisible, there exist efficient outcomes with some agents randomly unemployed, as in Rogerson (1988) . We integrate this idea into the modern theory of monetary exchange, where some trade occurs in centralized markets and some in decentralized markets, as in Lagos and Wright (2005) . This delivers a general equilibrium model of unemployment and money, with explicit microeconomic foundations. We show that the implied relation between inflation and unemployment can be positive or negative, depending on simple preference conditions. Our Phillips curve provides a long‐run, exploitable, trade‐off for monetary policy; it turns out, however, that the optimal policy is the Friedman rule.     

Unemployment of Skilled and Unskilled Labor in an Open Economy: International Trade,Migration, and Outsourcing

We show how international trade, migration, and outsourcing affect unemployment of skilled and unskilled labor, in a framework that integrates the Heckscher–Ohlin model of trade with the Shapiro–Stiglitz model of unemployment. Our approach allows us to analyze changes in not only aggregate unemployment, but also the distribution of unemployment between skilled and unskilled labor. As the analysis demonstrates, the unemployment rates of these two types of labor often move in opposite directions, thereby dampening the change in aggregate unemployment. Results depend on the source of comparative advantage, based on international differences in (for example) unemployment insurance or production technology.     

The Political Economy of Domestic Labor Mobility: Specific Factors,Landowners, and Education

Political actors today seek to influence labor mobility via education just as they have for centuries. Landowners in countries with large industrial sectors attempt to suppress education levels to maintain their labor supply, as educated workers are able to move into industrial work more easily than uneducated workers. However, the relationship between large landowners and education is more complex than has been previously theorized. Using a specific‐factors model, I show that large landowners in countries with little economic development actually have an incentive to increase education levels. They realize the returns of an educated workforce without fearing their mobility because competing industrial opportunities for the workers do not exist. In either case, the ability of landowners to achieve their political goals is a function of their ability to overcome the collective action problem and effectively influence the state's provision of education. Powerful landowners successfully deny education in industrialized countries and provide it in agricultural countries. An analysis of panel data covering 77 countries from 1975 to 2000 confirms the conditional nature of the relationship.     

Labor Mobility and East Asian Integration

East Asian economic integration is commonly analyzed in the context of trade in goods and services and capital flows, while labor flows have been very much neglected. Yet labor flows in the region are rapidly growing, given the diversity in levels of economic development, employment opportunities and wage levels, and the existence of labor surplus and deficit countries. Labor migration poses more benefits than costs for both sending and receiving countries, but there are more sensitivities toward labor flows than trade and capital flows. The characteristics and government policies are different for the unskilled and semiskilled foreign workers and for the professionals and highly skilled. Regional cooperation among countries is needed to manage the flows, reduce the incidence of illegal and undocumented workers, reduce the transaction costs of migration, and protect the rights of these workers.