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Wage indexation, migration, and unemployment
journal contribution
posted on 2000-01-01, 00:00 authored by B R Hazari, Pasquale SgroThis article sets up a two-goods model with wage indexation and migrants. A dual labor market is introduced where the domestic workers receive an indexed wage while migrants receive a market-determined wage. The traded sector may be assumed to be unionized while the non-traded goods sector is non-unionized giving rise to flexible wages. This provides an example of segmentation and wage indexation. The wage indexation creates unemployment in the traded sector and the segmentation allows this unemployment to persist. The main results obtained are: sector-specific migration of labor may raise domestic welfare, while with capital accumulation such migration necessarily raises the relative price of the non-traded goods, leading to structural adjustment.
History
Journal
International review of economics and financeVolume
9Issue
3Pagination
257 - 265Publisher
ElsevierLocation
Amsterdam, The NetherlandsISSN
1059-0560Language
engPublication classification
C1.1 Refereed article in a scholarly journal; C Journal articleCopyright notice
2000, ElsevierUsage metrics
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