Labour-Market Aspects of Enclave-Led Growth.

Economic activity sometimes brings advanced technology to an enclave in a less-developed region where low-wage labor can be combined with skilled labor and capital from the advanced region to produce commodities for export to world markets. Potential skills of local workers may not be known to either workers or employers until some time elapses after the job. Those revealed to possess skills replace high-paid alien workers. This paper describes the effect on the local labor market of this process both during the period when alien workers are required and after their departure. The role of a minimum-wage requirement is also analysed.