Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/149447 
Authors: 
Year of Publication: 
2015
Citation: 
[Journal:] IZA Journal of Migration [ISSN:] 2193-9039 [Volume:] 4 [Publisher:] Springer [Place:] Heidelberg [Year:] 2015 [Pages:] 1-22
Publisher: 
Springer, Heidelberg
Abstract: 
We propose a theory of free movement of goods and labor between two economies in the presence of moral hazard. Each country produces two final goods where the productive efforts of workers cannot be perfectly observed, or verified only in the complex industry. We show that national institutional quality and the system of the early childhood care and education determine the pattern of international trade. However, individuals' decisions to emigrate depend only on the national institutional quality, where the country with more developed institutions serves as the host country of immigrants. We conclude that international labor movement promotes international trade.
Subjects: 
Comparative advantage
Occupational choice
Education
Institutions
Immigration
Moral hazard
Organization of production close
JEL: 
B52
I21
F10
F16
F22
J24
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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