A housekeeper from the Philippines is contemplating immigrating to Singapore in search of higher wages. Suppose that the housekeeper earns approximately $2,000 annually and expects to find a job in Singapore worth approximately $5,000 annually for a period of 3 years. Furthermore, assume that the cost of living in Singapore is $500 more per year than at home.
a. What can we say about the productivity of housekeepers in Singapore versus the Philippines? Explain.
b. What is the total gain to the housekeeper from migrating?
c. Is there a corresponding gain for the employer in Singapore? Explain.