Income Inequality and International Migration

This paper provides a theoretical analysis of the impact of international factor movements on the personal distribution of income. It distinguishes between two types of labor (skilled and unskilled) and focuses on the consequences of their migration. There is a simple, yet powerful, relationship between factor flows, the structure of domestic production, and changes in inequality. The effects of labor migration are shown to depend on whether skilled labor and unskilled labor are "friends" or "enemies" in production. The authors conclude with a discussion of the possible impact on inequality of some past and current migrations. Copyright 1992 by Royal Economic Society.