We introduce international labor mobility in a three-sector general equilibrium model with rural-urban migration. We demonstrate that under some reasonable conditions an inflow of foreign skilled labor (capital) can reduce skilled-unskilled wage inequality

We examine the short- and long-term effects of urbanization, via favorable urban development policies, on income distribution and social welfare for a developing country. The urban manufacturing sector is characterized by imperfect competition and free entry. Urbanization shifts rural workers to...