Good Economics for Hard Times: Better Answers to Our Biggest Problems

by Abhijit V. Banerjee

you only leave home when home won’t let you stay.7

It was the first to show the supply-demand model might not directly apply to immigration.

A second reason why low-skilled migration might push up the demand for labor is that it slows down the process of mechanization.

This logic says that the wage the firm must pay to get workers to work typically has to be high enough that being fired actually hurts. This is what economists call the efficiency wage.