Unemployment is present in many developing countries. Thus, the government of a country that suffers from chronic unemployment often wants to emigrate some workers to foreign countries. This paper investigates whether such a policy is successful for reducing domestic unemployment.

We examine the effect of emigration of skilled and unskilled labor on pre-existing wage gap between the skilled-unskilled labor. The results by Marjit and Kar (2005) will be confirmed also in a dual economy setup.