EC239 Chapter Notes - Chapter 4: Income Distribution, The China Syndrome, Free Trade
Document Summary
This figure finds the equilibrium wage and labour allocation with migration across countries (similar to how the earlier figure on page 3 determined the equilibrium allocation of labour between sectors) If no obstacles to labour migration exist, workers move from home to foreign until the. Lower wage due to less land per worker (lower purchasing power of wages is equal across countries (point a), with. As the table below shows, real wages in 1870 were much higher in destination countries than in origin countries: up until the eve of. World war i in 1913, wages rose faster in origin countries than in destination countries: migration moved the world toward more equalized wages. In the early 20th century, immigration to the u. s. increased dramatically (higher wages: vastly coming from eastern and southern europe, tight restrictions on immigration were imposed in the 1920s.
