This paper analyzes the consequences of international factor movements on the skilled-unskilled wage inequality in a dual-economy set-up that includes unemployment and three intersectorally mobile factors of production-unskilled labor, skilled labor, and capital. Thus far, theoretical literature...

We introduce international labor mobility in a three-sector general equilibrium model with rural-urban migration. We demonstrate that under some reasonable conditions an inflow of foreign skilled labor (capital) can reduce skilled-unskilled wage inequality.

We introduce international labor mobility in a three-sector general equilibrium model with rural-urban migration. We demonstrate that under some reasonable conditions an inflow of foreign skilled labor (capital) can reduce skilled-unskilled wage inequality