International migration of unskilled labor, Minimum wages, Two-country macroeconomic model, F41, F22, J38
Abstract
This paper investigates the effects of minimum wages on the inflow of unskilled
foreign workers in a two-country macroeconomic model. We assume that all
workers are unskilled and workers move from a country of lower expected
real-consumption wages to a country of higher ones. This paper shows that, in
cases where minimum wages are not introduced, workers move from a country
with a larger domestic labor force to a country with a smaller one. If minimum
wages are introduced into a country with a smaller domestic labor force, such
migration can probably be reduced.