ABSTRACT
Most of the existing literature on international labour mobility (ILM) deals with either the causes of labour mobility or the ‘welfare effects’ of labour mobility, that is, the question of whether international mobility of labour will depress the wages of the host country or whether there will be some benefit for the sending country (see, for example, Greenwood, 1969; Djajic, 1985; Rivera-Batiz, 1989; Quibria, 1989; Brecher and Choudhri, 1987, 1990; Abowd and Freeman, 1991; Borjas and Freeman, 1992; Nikas, 1992; Ichino, 1993; De New and Zimmerman, 1993a and b; Freeman, 1993). This literature often relies on ad hoc assumptions regarding the workers motives for moving from one job to another: authors either incorporate in their analysis several social and economic variables (gravity models) (see e.g. Greenwood, 1969; Stark, 1991; Abowd and Freeman, 1991; Zimmermann, 1992; Faini and Venturini, 1993; Vijverberg, 1993) or employ models which are based on the assumption that labour mobility depends upon expected real income differences (see e.g. Rodriguez, 1976; Djajic, 1989; Borjas, 1991; Stark, 1991; Burda and Wyplosz, 1992, 1993; Baldwin and Venables, 1993; Dolado, 1993). Moreover, none of these studies has incorporated the possibility of international labour mobility into a macroeconomic framework.
