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Title:Domestic labor, foreign capital and national welfare PDF Logo
Authors:Broll, Udo
Hansen, Sabine
Marjit, Sugata
Issue Date:2004
Series/Report no.:Dresden discussion paper in economics 12/04
Abstract:The competitive allocation of labor across different sectors of an economy may not be socially optimal when one sector uses foreign capital. We argue that a suitably designed government intervention is required to restrict the sectors to their optimal size and maximize national welfare. Such a policy internalizes the possibility of repatriation and reinvestment. We demonstrate the optimality of a minimum wage regulation.
Subjects:Foreign capital
factor mobility
national welfare
targeting
JEL:F16
F21
Document Type:Working Paper
Appears in Collections:Dresden Discussion Paper Series in Economics, Faculty of Business and Economics, TU Dresden

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