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Open Borders & Search for Opportunities

Open Borders & Search for Opportunities

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Published by Sati Shankar
We have taken up the term Open Border to mean simply that there are no or limited migratory restrictions and the factors of productions and especially the human capital may cross the international border for goods, services and other opportunities for employment to maximize his/her satisfaction. An exercise of this type may have special significance, in this era of globalization, as it may throw some light on the behavioral intricacies of the economic agents. Information and Communication Technology (ICT) has made it feasible more by enabling the out sourcing in which agents may market their productivities, without actually leaving physically, their countries.
We have taken up the term Open Border to mean simply that there are no or limited migratory restrictions and the factors of productions and especially the human capital may cross the international border for goods, services and other opportunities for employment to maximize his/her satisfaction. An exercise of this type may have special significance, in this era of globalization, as it may throw some light on the behavioral intricacies of the economic agents. Information and Communication Technology (ICT) has made it feasible more by enabling the out sourcing in which agents may market their productivities, without actually leaving physically, their countries.

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Published by: Sati Shankar on Feb 14, 2011
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 Manifest 2006-007 
OPEN BORDERS & SEARCH FOR OPPORTUNITIES
 Sati Shankar 
Global Synergetic Foundation
 New Delhi,June.16th, 2008
Abstract:
 
We have taken up the term Open Border to mean simply that there are no or limitedmigratory restrictions and the factors of productions and especially the human capital may crossthe international border for goods, services and other opportunities for employment to maximizehis/her satisfaction. An exercise of this type may have special significance, in this era of globalization, as it may throw some light on the behavioral intricacies of the economic agents.Information and Communication Technology (ICT) has made it feasible more by enabling the outsourcing in which agents may market their productivities, without actually leaving physically, theircountries.
Keywords:
migration , job, employment, opportunities, wages, disparityFOR FREE DISTRIBUTION ONLY
 NOT FOR SALE 
Creative Commons License
Manifest by Sati Shankar is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 UnportedLicense. Based on a work atwww.globalsynergetic.org. Permissions beyond the scope of this license may be availableathttp://manifest.satishankar.com/
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 Manifest 2006-007 
OPEN BORDERS & SEARCH FOR OPPORTUNITIES
S.S.D.Pandey
ORIENTATION
We have taken up the term Open Border to mean simply that there are no or limited migratoryrestrictions and the factors of productions and especially the human capital may cross theinternational border for goods, services and other opportunities for employment to maximizehis/her satisfaction. An exercise of this type may have special significance, in this era of globalization, as it may throw some light on the behavioral intricacies of the economic agents.Information and Communication Technology (ICT) has made it feasible more by enabling theout sourcing in which agents may market their productivities, without actually leavingphysically, their countries.An individual who feels deprived or dissatisfied of not having something, to be taken up indetail later in this paper, and if borders are open, generally becomes tempted, as he perceivesincentive, to cross the border in search of opportunities to satisfy him self. This satisfactionmay be
 pecuniary 
or
 psychic
and may come in the form of cheaper availability of goods,services or opportunities which may either be due to lower cost of production or due todifferences in the rate of exchange. The core of the idea plan lies in the interpretation of the above displacement of the individualsas
relative deprivation.
The approach we follow partially belongs to Yitzhaki, (1979, 1982),Runciman (1966).Runciman (1966) defines four conditions:(i)Individual does not have X(ii)Individual sees some other agent(s), possibly including himself at some previous orfuture point of time, as having X (whether or not that will be the case),(iii)Individual wants X, and(iv)Individual sees it feasible that he should have X. The feeling of deprivation can be defined by (i) and (iii) where as the relativity of the concept isdue to (iii) and (iv).If u(X) is an index of satisfaction for having X, we can define –u(X), as an index of deprivation of having not more than X. Then maximizing u(X), with taking income constant, has the sameresult as minimizing-u(X) and taking income constant. Hence utility and deprivation are the twofacets of the same coin. The former relates to “having” whereas the latter to “not having”. Twodifferent approaches, based on the relativity concept (i.e., existence of reference groups in thesociety) and the welfare function, have been put forward. Deprivation arises from not havingthe units is an increasing function of the number of individuals in the reference group who haveit. It should be noted here that envy or altrusion are not postulated, what counts is how agentsevaluate satisfaction and what they do not have.Let two income units X1 and X2 contained in X and be represented by an income[Y, Y+∆Y]when ∆Y→0.Let F(Y) be a cumulative distribution of income. Then 1-F(Y) is the percentage of individuals whose income is higher than Y, hence 1-F(Y) represents the percentage of 
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 Manifest 2006-007 
individuals who have the goods (opportunities) represented by the income range [Y, Y+∆Y] andthe feeling of deprivation is an increasing function of the percentage of individuals who haveincome larger than Y, i.e., 1-F(Y). Now let h (1-F(Y)) be the deprivation from not having [Y, Y+∆Y], when h (0) =0 and h’>0. Then the individual whose income is Y is deprived of all theunits of the income above Y, i.e., h[Y, Y+∆Y]-h[Y]. Thus we can writeD(Y) = h [1-F (z)] dz(1) 
 Y
 To simplify the discussion let us assume that h [1-F(Y)] = 1-F(Y). The deprivation function is defined as “not having” but it is more convenient to work on aconcept defined on “having”. Why not 1-F(Y) might do just well- is not the case. If a richbecomes richer than the reference group F(Y) remains the same and so does 1-F(Y). Yet aproper measure of relative deprivation should be sensitive enough to these, it raises the levelof deprivation in the reference group.Let us define the satisfaction (gratification) function as
 Y
S(Y) = h [1-F (z)] dz(2) 
0
Since we have assumed above that h [1-F(Y)] = 1-F(Y), (2) may be written as 
 Y
S(Y) = [1-F (z)] dz(3) 
0
 The satisfaction and the deprivation function complement each other in the following manner:S(Y) + D(Y) = µ(4)Where µ is mean income.Hence while evaluating a change in the wellbeing of an individual, in a given reference group,it does not matter which function we are using. However, once bring in the shifting from onereference group to an other, i.e., when we introduce the border crossing, it may well happenthat satisfaction and deprivation increases or decreases in tandem. Note the properties of theabove functions:S/Y = [-F(Y)]0(5)
2
S/∂Y
2 =
-f(Y)0,(6)i.e., the marginal gain (satisfaction) is nonnegative and nonincreasing.Intuitively, the individual will be more satisfied the more valued are the goods (opportunities)he possesses. This value is an increasing function of 1-F(Y), the function of the individual in thereference group who possess these goods (opportunities).From the above general set up some of the pertinent conclusions which can be drawn may be:(a) that in a society in which possessing a car is uniformly desirable, having a car is morevaluable to an individual when many individuals possess cars than only a few do.(b)An increase in the income of some one richer than the individual, does not affectindividual’s satisfaction but it increases his deprivation.(c)An increase in the income of the person who is poorer than the individual, such thatindividual’s rank in the reference group remains intact, increases satisfaction but does notaffect his deprivation.(d)Deprivation of an individual can be written as a percentage of the individual who are richer
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