This study analyses the effects of labour market integration on the domestic economy. We explore the effects of skilled and unskilled foreign labour on the sustainability of a small open economy with innovation and growth. Welfare implications such as Gross Domestic Product growth and wage inequality are explicitly modelled in a general equilibrium framework. The model is applied to a small open economy such as Singapore to derive key policy implications to balance economic growth with skilled workers and innovation activities in the economy. The study critically examines the foreign workers' policy in the Singaporean economy in terms of allowing both skilled and unskilled workers into the domestic labour market. The results of the model indicate that balancing foreign skilled and unskilled labour, with the development of indigenous innovation capabilities, is crucial to maintain strong, sustainable growth in the domestic economy. The results of the model also indicate that a labour market policy that allows more skilled workers tends to increase the supply of labour and reduce the skilled wage gap in the economy.
Journal of Economic Integration aims to provide relevant policy implications on the world economy that has been evolving all the time in all aspects. The Journal is founded by Dr. Choo, Myung-Gun in the second half of the 1980s who was particularly interested in the papers studying the group of economies as the object of investigation, expecting the concept of “Economic Integration” gives birth to the new phenomena. We believe that the insightful policy implications of the world economy need to be discussed in order to manage the closely integrated world economy in a more efficient and desirable way and thus hopefully hunger, poverty, and crisis become almost forgotten words in the near future. To achieve it, we need to be intellectually ready for the economic integration, with a deep understanding on the past and the present of financial, trade, and political-economic integrations.
Founder of this Journal is Dr. Myung-Gun, Choo who has imagined in the 1980s that “economic integration” will be one of the most important pheonmena and would like to establish an economic journal touching upon the issue. He is now a board member of the foundation for Sejong University. Since then, Professor Hwan-Ho Lee at Sejong University has been devoted to develop the Journal for more than 20 years up until. 2010 . The Journal is managed at Center for Economic Integration within Sejong University.
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