長崎大学経済学部

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Abstract:
This paper investigates the effects of minimum wages on the inflow of unskilled foreign workers in a two-country macroeconomic model. We assume that all workers are unskilled and both countries’labor markets are competitive. In this model, workers move from a country of lower expected real-consumption wages (nominal wages divided by the consumer price index and multiplied by the probability of employment) to a country of higher wages. This paper shows that, in cases where minimum wages are not introduced, workers move from a country with a larger domestic labor force (initial labor endowment) to a country with a smaller one. If mini-mum wages are introduced into a country with a smaller domestic labor force, such migration can likely be reduced. This results from the fact that a country with a smaller domestic labor force, by increasing its minimum wages, decreases its expected real-consumption wages because de-creases in the employment probability will be larger than increases in real-consumption wages.

Keywords:
International migration of unskilled labor; Minimum wages; Two-country macroeco-nomic model