Labour allocation across labour markets under different informational schemes and the costs and benefits of signalling

The effect of informational asymmetry on the level and skill composition of international migration and on the level of output are examined first, in the absence of signalling and, second, when a signalling device is available. Using total output as a criterion authors find, inter alia, that signalling may not perfectly compensate for informational asymmetry and that reduction in the costs of signalling may not raise output.