A new GLO Discussion Paper finds that restrictions on migration causes unemployment while the effects of restrictions on trade are not so clear.
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GLO Discussion Paper No. 614, 2020
Unemployment of Unskilled Labor due to COVID-19 led Restriction on Migration and Trade – Download PDF
by Mandal, Biswajit & Chaudhuri, Saswati & Prasad, Alaka Shree
GLO Fellow Biswajit Mandal
Author Abstract: To combat COVID-19 the entire world has resorted to global lockdown implying restriction on international labor migration and trade. This paper aims to check the effect of such restrictions on the unemployment of unskilled labor in the source country. In competitive general equilibrium framework with three goods and four factors restriction on migration raises unemployment for given factor intensity. The results remain same even in a slightly different structure of the economy. In case of trade restriction, however, the rise or fall in unemployment depends on both the structure of the economy and the factor intensity assumption.
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