Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/20262
Authors: 
Schiff, Maurice
Year of Publication: 
2004
Series/Report no.: 
IZA Discussion paper series 1027
Abstract: 
Labor market integration raises welfare in the absence of distortions. This paper examines labor and goods market integration in a general equilibrium model with social capital. The findings are: i) labor market integration has an ambiguous impact on welfare, and raises it if the goods produced and the labor skills are sufficiently different; ii) compared to Pareto optimum, labor mobility (social capital) is excessively large (depleted); iii) trade is superior to labor market integration if trading costs are no higher than private migration costs; otherwise the outcome is ambiguous; and iv) the creation of new institutions in response to labor market integration has an ambiguous impact on welfare.
Subjects: 
social capital
labor market integration
trade
JEL: 
J61
F22
F16
Z13
Document Type: 
Working Paper

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