Agell and Lundborg (1995) have accommodated the fair wage hypothesis (FWH) in an otherwise 2x2 Hechscher-Ohlin-Samuelson model for examining the robustness of certain standard trade theorems. The present paper proposes to introduce the FWH in a three sector general equilibrium model with two...

The paper examines the welfare consequences of an inflow of foreign capital and an emigration of skilled labour in a small open economy in terms of a four sector general equilibrium model in the presence of endogenous skill formation and imperfection in the market for unskilled labour. It finds...

Payroll taxes represent a major distortionary influence of governments on labor markets. Thispaper examines the role of payroll taxation and the social safety net for cyclical fluctuations ina nonmonetary economy with labor market frictions and unemployment insurance, when thelatter is only...