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Immigration, investment, and real wages

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  • Elise Brezis

    ()

  • Paul Krugman

Abstract

When a country is the recipient of large-scale, politically motivated immigration -- as has been the case for Israel in recent years -- the initial impact is to reduce real wages. Over the longer term, however, the endogenous response of investment, together with increasing returns, may well actually increase real earnings. If immigration itself is not wholly exogenous, but responds to real wages, there may be multiple equilibria. That is, optimism or pessimism about the success of the economy at absorbing immigrants may constitute a self-fulfilling prophecy.

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Article provided by Springer in its journal Journal of Population Economics.

Volume (Year): 9 (1996)
Issue (Month): 1 (February)
Pages: 83-93

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Handle: RePEc:spr:jopoec:v:9:y:1996:i:1:p:83-93

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References

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  1. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  2. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
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Citations

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Cited by:
  1. Epstein, Gil S, 2002. "Informational Cascades and Decision to Migrate," CEPR Discussion Papers 3287, C.E.P.R. Discussion Papers.
  2. Elise S. Brezis & Ariel Soueri, 2012. "Globalization and Migration: A “Unified Brain Drain” Model," Working Papers 2012-15, Department of Economics, Bar-Ilan University.
  3. Elise Brezis & Ariel Soueri, 2011. "Why do Students Migrate? Where do they Migrate to?," Working Papers 25, AlmaLaurea Inter-University Consortium.
  4. Hainmueller, Jens & Hiscox, Michael J., 2007. "Educated Preferences: Explaining Attitudes Toward Immigration in Europe," International Organization, Cambridge University Press, vol. 61(02), pages 399-442, April.
  5. Tremblay, Rodrigue, 1998. "Mobilité internationale des facteurs de production en situation de chômage et de libre-échange," L'Actualité Economique, Société Canadienne de Science Economique, vol. 74(2), pages 245-271, juin.
  6. Matteo Gomellini & Cormac O' Grada, 2011. "Outward and Inward Migrations in Italy: A Historical Perspective," Quaderni di storia economica (Economic History Working Papers) 08, Bank of Italy, Economic Research and International Relations Area.
  7. Bénassy, Jean-Pascal & Brezis, Elise S., 2013. "Brain drain and development traps," Journal of Development Economics, Elsevier, vol. 102(C), pages 15-22.
  8. Yaya, Mehmet-Erdem, 2005. "Immigration, Trade and Wages in Germany," MPRA Paper 505, University Library of Munich, Germany, revised Jun 2006.
  9. Sarit Cohen & Chang-Tai Hsieh, 2001. "Macroeconomic and Labor Market Impact of Russian Immigration in Israel," Working Papers 2001-11, Department of Economics, Bar-Ilan University.
  10. Langhammer, Rolf J., 1994. "Wirtschaftsreformen in Afrika: getragen von der Gunst der Geber?," Kiel Working Papers 666, Kiel Institute for the World Economy.
  11. Katarzyna Budnik, 2011. "Temporary migration in theories of international mobility of labour," Bank i Kredyt, National Bank of Poland, Economic Institute, vol. 42(6), pages 7-48.
  12. BEHRENS, Kristian & SATO, Yasuhiro, 2006. "Labor market integration and migration: impacts on skill formation and the wage structure," CORE Discussion Papers 2006001, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  13. Michael Beenstock & Jeffrey Fisher, 1997. "The macroeconomic effects of immigration: Israel in the 1990s," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 133(2), pages 330-358, 06.
  14. Lucas Bretschger, 2001. "Labor Supply, Migration, and Long-Term Development," Open Economies Review, Springer, vol. 12(1), pages 5-27, January.
  15. Neil Gandal & Gordon H. Hanson & Matthew J. Slaughter, 2000. "Technology, Trade, and Adjustment to Immigration in Israel," NBER Working Papers 7962, National Bureau of Economic Research, Inc.

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