The Substitutability of Emigrants and Non-migrants in the Construction Sector of Pakistan

Abstract

To predict the impact of emigration on labour displacement and factor rewards, a trasloogarithmic production function has been used. The estimation determined that unskilled emigrants and skilled and unskilled non-migrants have a complementarity with capital. While skilled emigrants and capital are substitutes, they are complementary with unskilled non-migrants. Based on these results, the model predicts displacement of unskilled non-migrants in the short run. Long-run predictions include an increase in wages of all kinds of workers and the adoption of capital-intensive techniques.