N3

Consider a situation in which there are just two countries: An Origin, and a Destination Country ("destination 1").

Wages in the origin country are given by:

wo=8+s

Wages in the destination are given by:

wd1=2+3s

where s represents years of schooling.

Migrating from the Origin to the Destination country requires paying a fixed migration cost of 4.

a. Draw a figure in which the y-axis represents wages net of migration costs in each of the countries and the x-axis represents years of schooling