Question

Question #5: A housekeeper from the Philippines is contemplating immigrating to Singapore in search of higher wages. Suppose the housekeeper earns approximately $3,000 annually and expects to find a job in Singapore worth approximately $8,000 annually for a period of three years. Furthermore, assume that the cost of living in Singapore is $800 more per year than in Home.

a. What can we say about the productivity of housekeepers in Singapore versus the Philippines? Explain.

b. What is the total gain to the housekeeper from migrating?

c. Is there a corresponding gain for the employer in Singapore? Explain

Answer 1

A) Productivity of housekeepers in Singapore is comparatively more than of Philippines as it is clearly evident from the pay they receive which is more for Singapore housekeepers than Philippines one.

B) Let us assume cost of living in Philippines to be $ 100.

Hence , cost of living in Singapore would be 100 + 800 = $ 900

Now, total gain to the housekeeper from migrating would be = (Earning obtained from Singapore - Cost of living) * 3 - (Earning obtained from Philippines - Cost of living) * 3

= (24000 - 2700) - ( 9000 - 300)

= ( 21,300) - ( 8,700) = $ 12,600

C)  Yes, there is a corresponding gain for the employer in Singapore as they would get skilled labourers and can bargain with the pay.