This paper discusses the problem of unemployment in developed countries that faces international labor movement. There are two types of unemployment. The first traditional type of unemployment exists simply because the common wage rate is fixed and higher than the equilibrium level. The second one may exist when the wage rate in one sector is high and fixed, while that in the other is flexible. On the other hand, an extensive movement of labor among countries has been observed. Thus, this paper investigates the effects of immigration and other policies on the two types of unemployment.
JEL classification: F16, F22, J64, R23