Why do workers migrate from labour abundant countries to countries with a scarcity of labour

Home, - Discuss marginal product of labour

Question: a. What does the expression "marginal product of labour" mean?

"Marginal product of labour" refers to increase in sum of production with the increase in one extra unit of labour i.e. adding one more employee while all other factors of production remain same. It is measurement of revenue with the additional labour. In short run, when more employees are recruited then there is declination marginal product applying law of diminishing model.

For instance if production can be done at discrete, then marginal product of labour for output Y will be ΔY/ΔL.For example factory is manufacturing 100 widgets and with hiring of one more employees then there is production of 106 widgets so the marginal product of labour will be 6.

According to Konings and Vanormelingen, 2015, pg.4(3))In long run, the marginal product of labour can be enhanced with provision of effective training to employees which consequently increases the productivity of employees and creates spill over effects and ultimately can increase the revenue of business.

b. Why do workers (skilled and unskilled) migrate from labour abundant countries to countries with a scarcity of labour?


Labour abundant countries are countries which have high supply of labour but demand of the labour is less. The employment opportunities in labour abundant countries get shrink as there are many people available to work for same job. Moreover, with labour abundance, the wages are also offered lower due to mismatch of demand and supply of labour. The business gets high bargaining power to negotiate wages at fewer rates easily. Countries like India have laboured in abundant and thus many Indians move to foreign countries for good wage and attract opportunities for employment (Khadira B., 2006, pg.3(1)). People also migrate from the influence of social structures and development patterns. Regardless of skill level of workers, workers migrate to countries where there is high demand of labour and they can get the reasonable rates of wage for working. Skilled labour migratesfornot only to have high perks but also utilise skills appropriately in the right place where they can grow exponentially and become a successful human being. There are others which make workers to migrate such as disruption in economy such as Brexit created havoc for business and labour made people to migrate from Britain to Germany and many other countries. It has been observed that high skilled labour seek to use their skill productively and thus prefer to settle in developed countries tolearn new culture, language and become a multinational personality.

c. How has that migration of labour been of advantage to other countries?

Migration is to move for some time or even permanently from place of residence to other countries to find a job(Kaur et al. 2011, pg.1(1)). Migration of labour creates great impact on cultural, social and economic for people in both place of emigration and migration. Factors like poverty, land fragmentations, large size of families, poverty and natural calamities, lawlessness and many more prove the people of country to migrate to other countries and live peaceful life. The condition of country which is already facing calamities and poverty become poorer and worsen with the impact of migration. As with the decrease in number of labour there will be success of business, no development of goods and endlessly no growth of economy and thus it leads to negative impact on country where migration level is high. However, the countries where labour are migrating gain benefit in terms of growth of economy, chances of getting of more skilled labour which can even provide technological know-how, and effective rising of business which in result bring more employment, quality goods, more flow of money, and sound economic and social infrastructure for the country.

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