The paper shows that in a reasonable production structure for a developing economy a brain drain of skilled labour may raise the welfare of the economy while an emigration of unskilled labour is welfare reducing. Also an emigration of skilled/unskilled labour lowers the urban unemployment of unskilled labour and widens the skilled-unskilled wage-gap. The paper provides an alternative explanatio...

This paper focuses on the question of whether labour standards can affect comparative advantage in unskilled-labour-intensive goods, and thereby influence trade flows. Using a Heckscher-Ohlin framework, the effects of low labour standards depend on the type of standard: Forced and child labour lead to an increase in the endowment of unskilled labour, and hence improve comparative advantage in u...

In most OECD-countries, labour demand has shifted from unskilled to skilled over time. Many analyses of this phenomenon focus either on technical change, capital-skill complementarity or mutual labour substitution. Applying a more general approach enables us to explore the relative importance of different factors behind the shift in labour demand in Norwegian manufacturing. A multivariate error...

We construct a general equilibrium version of the Krusell et al. Econometrica 68, 1029, 2000 model with capital–skill complementarity. We assume several sources of growth simultaneously: exogenous growth of skilled and unskilled labour, equipment-specific technological progress, skilled and unskilled labouraugmenting technological progress and Hicks-neutral technological progress. We derive res...

This paper primarily investigates the issue of labour welfare in Indian industries, and seeks to make a contribution to the debate on labour reforms currently underway in India. It investigates the relative importance of technical change, elasticities of substitution, and labour regulations for labour welfare, proxied by the income shares of skilled and unskilled labour in total costs. Three pr...

Real wage rates in Ghana have fallen substantially over the last twenty years. In this paper survey data for the years 1991–1996 is used to assess whether this fall has continued in the 1990s. It is shown that the fall in average real wage rates has continued, the relative wage of skilled labour has risen, the share of skilled wages in total wages has remained constant and the share of wages in...

The paper develops a static three sector competitive general equilibrium model of a small open economy in which skilled labour is mobile between a traded good sector and a nontraded good sector andunskilled labour is specific to another traded good sector. The capital is perfectly mobile among all these three sectors. We examine the effects of change in different factor endowments and of global...

This paper presents a specific factor model of a small open economy to show the factor price effect and welfare effect of offshoring. Different to ambiguous wage effect conclusions of offshoring under Heckscher-Ohlin framework, the conclusions of this paper is clear-cut. Offshoring will benefit specific factor (skilled labour and land), hurts some non-specific factor (unskilled labour), and enl...

Within a small open economy fair wage model with unemployment of unskilled workers, we show that exogenous unskilled immigration increases the welfare of natives if the elasticity of the inverse labour demands exceeds a positive finite threshold. This threshold depends positively on the displacement ratio of native workers by immigrants and negatively on the share of immigrants in the unskilled...

In this paper we demonstrate that intra-industry trade (or FDI) between identical countries could produce the observed deterioration in the relative wages of unskilled workers. This involves a model of North-North integration through either increased trade flows or increased MNE-based production. Our motivation in this regard is arguments to the effect that trade cannot be responsible for the o...