Concepts

  • Place premium: This refers to the increase in earnings (usually PPP-adjusted) of a given person when that person migrates from one place to another, without any increase in the person’s skills or human capital. Roughly speaking: it addresses questions like: if a construction worker crossed the border from Mexico to the United States and took a job with comparable hours and using the same skill set, how much would the person’s pay increase?
  • Labor market convergence: This refers to the question: to what extent is there convergence between the per capita income (and other measures of wealth and production) between different countries? Is the gap between countries reducing with time? If so, to what extent? If not, why not?
  • Compositional effects
  • Income per natural: This is the mean annual income of persons born in a given country, regardless of where that person now resides.
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