LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Question
Chapter 4, Problem 14P
a)
To determine
The effect of an increase in foreign direct investment by a developed country in a developing country on the labor productivity and short-run wage rate in the developing country.
b)
To determine
The long-run implications of FDI.
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Suppose the demand for the Vietnamese inexpensive products from many countries over the world have increased by about 15 percent even under the Coronavirus pandemic in 2020 (from January through August). Suppose further that the demand for Vietnamese skilled workers by the Vietnamese companies producing new high-tech and advanced products have decreased by about 10 percent in 2020 compared to those in 2019. What has happened to the wage gap between Vietnamese skilled and unskilled workers in 2020? Which of the following is MOST appropriate for an answer?
A.
The wage gap is most likely to fall.
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It is hard to predict unambiguously how the wage gap changes given above information.
C.
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The wage gap is most likely to be little changed.
Perhaps b and c weren't the answer. Please let me know why the answer you chose is correct.
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By Labor Economics theory, what are the short-run and long-run effects of immigration on the wages of native workers? Use diagrams to illustrate your arguments.
Describe the evidence of these effects presented in the chapter.
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