1. 11 April 2002WTO-WB Symposium1 The Economic Implications of Liberalising Mode 4 Trade L Alan Winters University of Sussex

2. 11 April 2002WTO-WB Symposium2 Approaches to TMNP The polar forms: –International trade models –International migration models Intermediate approaches: –sectoral studies –business plan model

3. 11 April 2002WTO-WB Symposium3 Trade Models scale specialisation technology competition high barriers threat to competition pervasiveness of services size of services

4. 11 April 2002WTO-WB Symposium4 Trade and Factor Rewards factor price equalisation trade and migration are substitutes BUT wage differences could persist: –productivity –scale –taxes –more factors than goods; complete specialisation; factor intensity reversals

5. 11 April 2002WTO-WB Symposium5 Migration Models TMNP is NOT permanent migration but labour forces change similarly especially in revolving door TMNP

6. 11 April 2002WTO-WB Symposium6 Wages before Mobility WB WA MPLA MPLB OBOA L0

7. 11 April 2002WTO-WB Symposium7 Wages after Mobility WB WA MPLA MPLB OBOA L0 a b c W L1

8. 11 April 2002WTO-WB Symposium8 Winters WNWSWNWS M0M1 1/4 LNLN

9. 11 April 2002WTO-WB Symposium9 Quantifying the Barriers wage in S additional costs of supply: –transport, accomodation, visas, registration –QRs excessive regulation immigration controls price comparisons - difficult even under easier conditions

10. 11 April 2002WTO-WB Symposium10 Business Plan Model W N W S +C W S M0M1 LNLN

11. 11 April 2002WTO-WB Symposium11 Business Plan Model W N W S +C W S M0M1 LNLN

12. 11 April 2002WTO-WB Symposium12 Intersectoral Mobility wages across sectors are either (a) rigidly related –because of perfect mobility (b) quite independent –because refer to quite separate factors for long run (a) is pretty good search is for intermediate position

13. 11 April 2002WTO-WB Symposium13 Walmsley and Winters standard CGE model - GTAP perfect competition, no externalities modify for TMNP

14. 11 April 2002WTO-WB Symposium14 Temporary and Permanent Workers Host CountryHome Country LF m PL m TMTW PL s LF s Allocation Module

15. 11 April 2002WTO-WB Symposium15 Allocation of Temporaries Pool Supply of Temporary Migrants = Demand for Temporary Workers Home region N Host region N Home region 1 Host region 1 Sector JSector 1

16. 11 April 2002WTO-WB Symposium16 The Experiment quotas increased by 3% of host work force –skilled and unskilled separately supplied by labour exporters pro rata to work forces Table 1 gives flows –USA: +2.7m unskilled; +2.4m skilled –China: -2.4m unskilled; -.5m skilled

17. 11 April 2002WTO-WB Symposium17 Host vs Home Concepts Labour Flow from A to B Income Source Host Concept Home Concept PL B BB K B BB TL B retainedB T A T TL B remittedAA PL A AA K A AA

18. 11 April 2002WTO-WB Symposium18 Table 3: Economic Welfare II Welfare of temporary Workers III Welfare of temporary Migrants IV Welfare of permanent residents b V Welfare by home region III + IV VI Welfare by host region II + IV Deved Co.s 17596068577698275559182942 Deving Co.s -500298984-2068578301-25688

19. 11 April 2002WTO-WB Symposium19 Table 4: Percentage Changes II % change in Real Wage of Skilled Labour III % change in Real Wage of Unskilled Labour IV % Change in Rental Price of Capital V % Change in Real GDP c VI % Change in Terms of Trade Deved Co.s -1.02-0.610.781.05-0.24 Deving Co.s 5.130.12-0.52-0.910.53

20. 11 April 2002WTO-WB Symposium20 Table 5: Skilled vs Unskilled Liberalisation II Welfare of permanent workers (unskilled) III Welfare of permanent workers (skilled) IV Welfare of temporary migrants (unskilled) V Welfare of temporary migrants (skilled) VI Welfare of home region (unskilled) II + IV VII Welfare of home region (skilled) III + V Deved Co.s 6,86012150,58717,98957,44718,111 Deving Co.s 13,097-33,78137,67661,30950,77327,528