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The figure to the right illustrates the causes and effects of international labor mobility between two countries, Home and Foreign (*). The horizontal axis represents
The figure to the right illustrates the causes and effects of international labor mobility between two countries, Home and Foreign (*). The horizontal axis represents the total world labor force. The workers employed in Home are measured from the left, the workers employed in Foreign from the right. The left vertical axis shows the marginal product of labor in Home; the right vertical axis shows the marginal product of labor in Foreign. Suppose the initial allocation of labor has UL3 workers in Home and 0*L3 workers in Foreign. Given this initial allocation, labor can be expected to remain situated where it currently resides. migrate from Foreign to Home. migrate from Home to Foreign. POP\"? migrate toward the higher nominal wage. MPL MPL B A E C 0 Home 12 employment 1 Foreign 0 employment Total world labor force
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