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Wage arbitrage through skilled emigration: Evidence from the Pacific Islands

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  • Satish Chand
  • Michael Clemens
  • Helen Dempster

Abstract

Skilled workers in poor countries earn wages a fraction of that of their counterparts in rich nations. Here, we estimate the opportunities for wage arbitrage from emigration of workers from the Pacific Islands into Australia and New Zealand. Our calculations, based on wages earned by graduate accountants, computer science graduates and cooks with Certificate III qualifications, reveal wage premiums of a factor of up to 10 from emigration. Likewise, the cost of training to Australian standards within the Pacific Islands is as little as a third of that in Australia meaning that the total factor of economic arbitrage is 30.

Suggested Citation

  • Satish Chand & Michael Clemens & Helen Dempster, 2022. "Wage arbitrage through skilled emigration: Evidence from the Pacific Islands," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 9(3), pages 430-446, September.
    • Handle: RePEc:bla:asiaps:v:9:y:2022:i:3:p:430-446
    DOI: 10.1002/app5.355
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    References listed on IDEAS

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