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Labour Market Integration and Innovation: The Implications on Consumers
Author(s) -
Chowdhury Mehdi,
Mukherjee Arijit
Publication year - 2016
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/manc.12132
Subject(s) - labour economics , economics , market integration , wage , investment (military) , microeconomics , politics , political science , law
We show the effects of labour market integration on consumers. Labour market integration allows the firms in the labour‐recipient countries to hire skilled and unskilled workers at lower wages. If labour market integration creates the possibility of migration of skilled workers, it increases investments in innovation and benefits the consumers. However, if labour market integration creates the possibility of migration of unskilled workers, it neither increases investment in innovation nor benefits the consumers always. Our results suggest that the effects of labour market integration on the consumers depend on several factors such as the market size, differences in the labour coefficients and wage and the type of migrated workers (i.e. skilled or unskilled workers).