Labor-Market Effects of Migration
(Figure 15.4)

However, moving brings costs to the migrants. Therefore, only 20 million workers find the wage gains from moving high enough to compensate them for the migration costs (c), here valued at $1.80 per hour of work in the North. Press "Show migration costs" to show the distance c on the graph. Press "Show the number of migrants" to show the number of migrants (m) on the graph. The inflow of migrant labor thus bids the northern wage rate down only to $5.00, and the outflow of the same workers only raises southern wages up to $3.20. The new equilibrium, at points B, find the number who have chosen to migrate just equal to the demand for extra labor in the North at $5.00 an hour. Press "Show B points" to show the B points and the labor supply curve Sr for those who remain in the South.
Press "Continue" when you are ready to move on. The "Reset" button will clear the graph.