Migration between imperfectly competitive economies

Abstract

We study the role of bargaining as a barrier to migration in the equilibrium of a two‐region world with imperfectly competitive labour markets. Equilibrium migration is jointly determined by relative labour market bargaining powers, productivity and costs of migration. If migrants complement host factors, higher migration generally benefits both source and host economies. An enhancement of the bargaining power of typically weak migrant workers in host regions improves welfare.