Domestic labor, foreign capital and national welfare

The competitive allocation of labor across different sectors of an economy may not be socially optimal when one sector uses foreign capital. We argue that a suitably designed government intervention is required to restrict the sectors to their optimal size and maximize national welfare. Such a policy internalizes the possibility of repatriation and reinvestment. We demonstrate the optimality of a minimum wage regulation.

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Year of publication:	2004
Authors:	Broll, Udo ; Hansen, Sabine ; Marjit, Sugata
Publisher:	Dresden : Technische Universität Dresden, Fakultät Wirtschaftswissenschaften
Subject:	Arbeitsmarktpolitik \| Direktinvestition \| Internationale Faktormobilität \| Internationale Arbeitsmobilität \| Mindestlohn \| Mehr-Sektoren-Modell \| Wohlfahrtseffekt \| Theorie \| Foreign capital \| factor mobility \| national welfare \| targeting

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Series:	Dresden Discussion Paper Series in Economics ; 12/04
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	477818668 [GVK] hdl:10419/22716 [Handle] RePEc:zbw:tuddps:1204 [RePEc]
Classification:	F16 - Trade and Labor Market Interactions ; F21 - International Investment; Long-Term Capital Movements
Source:	EconStor

Persistent link: https://www.econbiz.de/10010296787