Suppose there are two economies A and B. People in each economy have education levels, e that are uniformly distributed between 10 and 16. All workers work and earn a salary that is determined by each worker's education level. Salaries in B are twice as high as in A: wA(e) = e wB(e) = 2e The cost of moving between A and B is C. When people complete their education they choose whether to move and then they have ten years to earn money. (Interest rate is zero and there is no dis- counting of the future) Payoffs for a person born in A with education = e Period Stay in A Move to B 1 e 2e - C 2 e 2e 3 e 2e . . . . . . . . . 10 e 2e