DP16214 Moving from a Poor Economy to a Rich One: A Job Tasks Approach

Author(s): Eran Yashiv
Publication Date: June 2021
Keyword(s): location task wage bundle, migrant tasks, rich and poor economies
JEL(s): E24, F22, F66, J24, J31, J61, O15
Programme Areas: Labour Economics, Development Economics, Macroeconomics and Growth
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16214

This paper studies outcomes for workers moving from a poor to a rich economy employing a job tasks based approach. It uses a data case, whereby a worker could decide to work in a richer economy and place himself there by a daily or weekly commute. This set-up faciliates the disentanglement of income differences motives from a plethora of other motives. Thus it eschews the bias inherent in many studies. The paper emphasizes the idea that tasks are tied to locations, and workers choose a location-task-wage `pack.' The task demanded, which is a bundle of skills, constrains human capital returns for movers. Relatively low task returns generate a substantial offset to the productivity gain for migrants, stemming from the rich economy having higher TFP and capital.