Three essays in inter-sectoral labour migration and government policy

Paul, Thierry Bernard Gerrard (1994) Three essays in inter-sectoral labour migration and government policy. University of Southampton, Doctoral Thesis.

Abstract

This thesis addresses two issues relevant to the transition from a protected to a more liberalised trade regime. First, in which circumstances should an immediate 'big bang' be preferred to a gradual liberalisation? Second, what is the impact of collective bargaining on government policy during the transition period?

Following a brief introduction, Chapter 1 reviews some models which address issues concerning the phasing of government policy in the trade literature.

In chapter 2, we study the dynamics of optimal trade policy in a model with costly inter-sectoral adjustment of labour where migrants pay less than the marginal social cost of migration. If the government is able to commit itself to future policy the optimal trajectory involves phasing in and then phasing out protection of the declining sector. Without the ability to make commitments, the equilibrium policy begins with and maintains free trade.

In chapter 3, we introduce unemployment in the migration process and assume that there is congestion in the labour market. In this framework, our numerical simulations show that gradualism is always optimal whatever the ability to make binding commitments.

Chapter 4 studies the interactions between a declining unionised industry and government policy. Unemployed workers can remain in the unionised sector, hoping that they will get a job there later, or incur a search cost and look for a job in the competitive sector. We find that the incentives for the industry to behave strategically in reaching inefficient contracts and raising wages are bounded by the fact that the government cannot fully undo the effects of high wages even with a costless subsidy.

Finally, chapter 5 summarises the main findings of this dissertation and makes suggestions for future research. (DX184004)

This record has no associated files available for download.

Contributors

Download statistics