Premium
Emigration, Finite Changes and Wage Inequality
Author(s) -
Beladi Hamid,
Kar Saibal,
Marjit Sugata
Publication year - 2013
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/ecpo.12001
Subject(s) - emigration , inequality , economics , wage , wage inequality , immigration , labour economics , production (economics) , demographic economics , geography , microeconomics , mathematics , mathematical analysis , archaeology
This article shows that large outmigration of labor leads to finite changes in the structure of production at source. We argue that sectors may vanish as they cannot pay higher wages consequent to emigration. We also inquire whether emigration of one type of labor hurts the other non‐emigrating type in this setup. Various situations when real incomes of the emigrating and the non‐emigrating types do not move together are demonstrated. This generalizes some of the existing results in the literature. In particular, emigration can lead to a drastic change in the degree of inequality depending on which of the sectors survive in the postemigration regime.