Pakistan Institute of Development Economics

PDR

THE PAKISTAN DEVELOPMENT REVIEW 

Labour Migration and Shadow Prices

The effect of migration and home remittances on the shadow prices of labour and foreign exchange is analysed here , taking into consideration changes in their social marginal productivities. It is argued that appreciation of currency, due to large capital inflows and not to increased productivity, results in a misallocation of resources, and, therefore, there is an urgent need for a proper analysis to determine the optimal level of emigrants.

Henry J. Bruton

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