Abstract
Barriers to labor mobility across countries coexist with substantial differences in living standards largely attributable to productivity differences. A growth model with endogenous labor movements is used to assess the effects on output, capital accumulation and welfare of removing barriers to labor mobility. The model is parameterized so that it is consistent with evidence on historical labor movements, and is applied to two cases: the enlargement of the European Union and the (hypothetical) creation of a common labor market in the North America. The main finding is that there are large resulting gains in terms of output and welfare.
Original language | English (US) |
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Pages (from-to) | 1059-1073 |
Number of pages | 15 |
Journal | Journal of Monetary Economics |
Volume | 56 |
Issue number | 8 |
DOIs | |
State | Published - Nov 2009 |
Externally published | Yes |
Keywords
- Capital mobility
- Cross-country income differences
- Labor mobility
- TFP
ASJC Scopus subject areas
- Finance
- Economics and Econometrics