This paper provides a novel explanation of educated unemployment, which is a salient feature of the labor markets in a number of developing countries. In a simple job-search framework we show that educated unemployment is caused by the perspective of international migration, that is, by the...

A new general-equilibrium model that links together rural-to-urban migration, the externality effect of the average level of human capital, and agglomeration economies shows that in developing countries, unrestricted rural-to-urban migration reduces the average income of both rural and urban...

This paper provides a novel explanation of 'educated unemployment,' which is a salient feature of the labor markets in a number of developing countries. In a simple job-search framework we show that 'educated unemployment' is caused by the perspective of international migration, that is, by the...

A new general-equilibrium model that links together rural-to-urban migration, the externality effect of the average level of human capital, and agglomeration economies shows that in developing countries, unrestricted rural-to-urban migration reduces the average income of both rural and urban...

We consider the case in which the opening up of an economy to migration results in departure of skilled workers. We point out that while the possibility of migration changes the set of employment opportunities, it also affects the structure of incentives: Higher returns to skills in the foreign...

When productivity is fostered by an individual's own human capital as well as by the economy-wide average level of human capital, individuals under-invest in human capital. The provision of subsidies for the formation of human capital, conditional on the subsidy being self-financed by tax...