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 on this subject has adopted the full-employment framework and hence ignored the problem of unemployment. The analysis in this paper reveals that the results crucially depend on the difference in the intersectoral factor intensities between skilled labor and capital. In particular, it demonstrates the existence of a possibility of deterioration in wage inequality following foreign unskilled-labor inflow. Copyright � 2008 The Authors. Journal compilation � 2008 Blackwell Publishing Ltd.

In this article we provide a theoretical analysis of the possible impact of trade and fragmentation on the skilled–unskilled wage gap in a small developing economy. In particular, we illustrate the possibility of a decline in the relative wage of the unskilled labor following an improvement in the terms of trade. (JEL F1, F11, F12)

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In recent years, many countries have been actively promoting medical tourism to stimulate economic growth. However, the expansion of medical tourism has potentially detrimental effects for the welfare of host countries. In particular, a decline in workers’ productivity could arise as a result of a reduction in public health care provision due to the expansion of the medical tourism sector. By addressing the crowding-out effect on labor productivity, this paper sheds light on the economic impacts of medical tourism on host countries. Our empirical analysis confirms that medical tourism, on average, has a positive effect on host economies’ output growth, particularly in non-OECD countries. Nonetheless, the output contribution of medical tourism is overestimated by an average of 26.8% if the unfavorable indirect productivity effect is not taken into account.

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This paper considers the employment and welfare effects of mixed ownership via partial privatization of state-owned enterprises for a developing economy. An increase in the private ownership lowers the production and, hence, worsens urban unemployment in the short run. However, in the long run, capital moves to the rural region, alleviating the problem of urban unemployment. The employment effect can have a positive contribution to social welfare in the long run. Copyright � 2006 The Authors; Journal compilation � 2006 Blackwell Publishing Ltd.