Productivity differences and the dynamic effects of labor movements

Paul Klein, Gustavo Ventura

Research output: Contribution to journalArticlepeer-review

67 Scopus citations


Barriers to labor mobility across countries coexist with substantial differences in living standards largely attributable to productivity differences. A growth model with endogenous labor movements is used to assess the effects on output, capital accumulation and welfare of removing barriers to labor mobility. The model is parameterized so that it is consistent with evidence on historical labor movements, and is applied to two cases: the enlargement of the European Union and the (hypothetical) creation of a common labor market in the North America. The main finding is that there are large resulting gains in terms of output and welfare.

Original languageEnglish (US)
Pages (from-to)1059-1073
Number of pages15
JournalJournal of Monetary Economics
Issue number8
StatePublished - Nov 2009
Externally publishedYes


  • Capital mobility
  • Cross-country income differences
  • Labor mobility
  • TFP

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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