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...

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...

To analyze the consequences of new technologies, which make it possible to employ distant labour, we model a developed country with high and medium-skilled labour interacting with an emerging market economy (EME) with medium and low-skilled labour. Expansion in labour supply induces medium-skill biased technical change, which raises the demand for such labour. As a result, inequalities tend to ...

The Role of Profit Sharing in Dual Labour Markets with Flexible Outsourcing We combine profit sharing for high-skilled workers and outsourcing of low-skilled tasks in partly imperfect dual domestic labour markets, when the wage rate for low-skilled worker is set by a labor union, to analyze how the implementation of profit sharing influence flexible outsourcing and low-skilled labour market out...

Equilibrium Unemployment with Outsourcing and Wage Solidarity Under Labour Market Imperfections We evaluate the effects of outsourcing and wage solidarity on wage formation and equilibrium unemployment in a heterogeneous labour market, where wages are determined by a monopoly labour union. We find that outsourcing promotes the wage dispersion between the high-skilled and low-skilled workers. Wh...

The paper presents a comparative political economy theoretical framework of high-skilled immigration (HSI thereafter) policies in advanced industrial countries and seeks to explain differences in countries’ policies in terms of HSI openness. I take from the traditional partisanship approach that political parties will pursue policies consistent with the preferences of their major constituencies...

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...

We set up a model, in which firms in a small industrialized country outsource part of their production to a foreign economy, which is rich in low-skilled labour. We analyse, how a decline in trade costs affects outsourcing activities and the production structure in the small economy. A stimulation of cross-border outsourcing raises wage dispersion and, if labour markets are unionized, also the ...

European Union economies are pressed by (i) a demographic change that induces population ageing and a decline of the workforce, and (ii) a split labour market that is characterized by high levels of unemployment for low-skilled people and a simultaneous shortage of skilled workers. This lack of flexible high-skilled workers and the aging process has created the image of an immobile labour force...