Industrial Upgrading: Rural-Urban Migrant’s Training Costs and Heterogeneous Labor Migration

This article uses H-T model to analyze economic effects of training costs and heterogeneous labor migration from the prospect of short and long terms. We build a general-equilibrium model with three sectors and apply comparatively static methods in discussing economic effects of decreasing training cost for migrants when developing countries are going through industrial upgrading. The main conclusions are a decrease in training costs reduces rural employment in the short run; there is a threshold in the long term: when rural wage is lower than this value, reducing training cost could increase rural employment, while decrease industrial employment with lower unemployment.