Question: A Labor Migration Model Follow the Migration Model presented in Chapter 4 : There are two countries, the US and Mexico. The United States, which
A Labor Migration Model Follow the Migration Model presented in Chapter : There are two countries, the US and Mexico. The United States, which has more capital per worker and a higher level of technology, has higher labor productivity and hence higher wages. Assume purely competitive labor and goods markets, only one product, full employment, and that labor is therefore paid its marginal product. Further assume that the United States allows no labor immigration. Migrations are typically driven by wage differentials, with labor moving from the location of low wages toward the location of high wages. In essence, labor votes with its feet. The labor supplies for the two countries are as follows: Mexican Labor Supply: US Labor Supply: Mexican Marginal Product of Labor: US Marginal Product of Labor: Use these equations to construct a
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