We develop a model of directed technology adoption, frictional unemployment, and migration to examine the effects of a change in skill endowments on the wages, employment rates, and emigration rates of skilled and unskilled workers. We find that, depending on the elasticity of substitution...

In a general equilibrium model of a small open economy with a nontraded goods sector involuntary low-skilled labour unemployment is introduced by an exogenously given wage rate, orientating ourselves by what has been called in the literature the 'European scenario'. By the concept of constrained...

A matching model in the line of Mortensen and Pissarides (1994) is augmented with a lowskill labor market and firing costs. It is shown that even with flexible wages unemployment is higher among the low-skilled and increases with skill-biased technological change. The two main reasons are that...