Essays on the economics of labor migration

Date of Completion

January 2010


Economics, General|Economics, Labor




The movement of heterogeneously skilled workers between distinct labor markets, both internally and internationally, is intrinsically linked to the global flow of capital and goods as this flow of factors determines the returns to labor in an economy. This dissertation seeks to explore and quantify those links. The first chapter explores a specific migration restriction policy, temporary workers' permits, and its feasibility. Taking into account the savings behavior of workers who migrate temporarily, a model derives the optimal migration length from the point of view of the host country, and the possible migration length that could pass a majority vote. The second essay shows that the relationship between the flow of goods and labor is dependent on the investment structure of an economy. Specifically, the impact of trade on skill migration from developing to developed countries depends on how capital adjusts in the sending economy relative to the receiving one. The third essay looks at the impact of reduced trade restrictions on the internal migration of workers between the tradable and nontradable sector in light of persistent unemployment in an open economy. Results show that the effect of trade on the size of the informal nontradable sector could be magnified or might disappear depending on the level of labor market regulations. ^