Essays on determinants and effects of labour mobility
Essays on determinants and effects of labour mobility
In this thesis we study the determinants and the economic effects of labour mobility in economic environments characterised by trading frictions, entry costs and credit constraints. People move to a different sector, or to a different geographical area, to improve their socioeconomic conditions. The focus is on the impact of mobility on inequality, unemployment and productivity.
Chapter 2 describes a framework to analyse the extension of the formal sector and income dispersion. We borrow a stochastic job matching model and we introduce a stage which determines the size of the modern market. People may choose between a safe return (traditional sector) and a higher expected return in a market with imperfect matching (modern sector). The participation to a market activity and ex-post match heterogeneity interact and affect the productivity as well as the variability of incomes in the economy.
In chapter 3 we consider the effect of remittances on the unemployment rate of the labour exporting country. Remittances have two opposing effects on the labour market. First they raise the income of the unemployed members back home. This causes the unemployment rate to rise. The second effect is on investment in the source country. Since it is likely that many firms in labour exporting countries are credit constrained, remittances available for investment will then relax these constraints and increase the level of the capital stock. The effect is to reduce the unemployment rate. If the ‘investment effect’ outweighs the ‘search income’ effect, then remittances will reduce the unemployment rate. The chapter contains also an empirical section to support the predictions of the theoretical analysis.
Chapter 4 builds upon the previous chapter by endogenizing the migration choice. We show that if there are no credit constraints in the economy, unemployment is a positive function of the proportion of migrants. Remittances increase the unemployment income of stayers and this has the effect of decreasing the labour force participation. However, if there are credit constraints the relation between unemployment and migration is not obvious and multiple equilibria can arise.
University of Southampton
Lotti, Emanuela
c69e74b5-86b4-4dfc-a619-cb73766193bb
2005
Lotti, Emanuela
c69e74b5-86b4-4dfc-a619-cb73766193bb
Lotti, Emanuela
(2005)
Essays on determinants and effects of labour mobility.
University of Southampton, Doctoral Thesis.
Record type:
Thesis
(Doctoral)
Abstract
In this thesis we study the determinants and the economic effects of labour mobility in economic environments characterised by trading frictions, entry costs and credit constraints. People move to a different sector, or to a different geographical area, to improve their socioeconomic conditions. The focus is on the impact of mobility on inequality, unemployment and productivity.
Chapter 2 describes a framework to analyse the extension of the formal sector and income dispersion. We borrow a stochastic job matching model and we introduce a stage which determines the size of the modern market. People may choose between a safe return (traditional sector) and a higher expected return in a market with imperfect matching (modern sector). The participation to a market activity and ex-post match heterogeneity interact and affect the productivity as well as the variability of incomes in the economy.
In chapter 3 we consider the effect of remittances on the unemployment rate of the labour exporting country. Remittances have two opposing effects on the labour market. First they raise the income of the unemployed members back home. This causes the unemployment rate to rise. The second effect is on investment in the source country. Since it is likely that many firms in labour exporting countries are credit constrained, remittances available for investment will then relax these constraints and increase the level of the capital stock. The effect is to reduce the unemployment rate. If the ‘investment effect’ outweighs the ‘search income’ effect, then remittances will reduce the unemployment rate. The chapter contains also an empirical section to support the predictions of the theoretical analysis.
Chapter 4 builds upon the previous chapter by endogenizing the migration choice. We show that if there are no credit constraints in the economy, unemployment is a positive function of the proportion of migrants. Remittances increase the unemployment income of stayers and this has the effect of decreasing the labour force participation. However, if there are credit constraints the relation between unemployment and migration is not obvious and multiple equilibria can arise.
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Published date: 2005
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Local EPrints ID: 465705
URI: http://eprints.soton.ac.uk/id/eprint/465705
PURE UUID: f3a94c1e-2859-4fd5-96fc-ba7aff1c6356
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Date deposited: 05 Jul 2022 02:40
Last modified: 16 Mar 2024 20:20
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Author:
Emanuela Lotti
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