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.

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