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Resisting Migration: Wage Rigidity and Income Distribution

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  • Razin, Assaf
  • Sadka, Efraim

Abstract

Like any trade activity, migration tends to generate gains to all parties involved, the migrants as well as the native—born population. However, with a mal—functionin& labor market, migration will exacerbate the imperfections in the market. Consequently, it may lead to losses to the native—born population which typically are quite sizable. Another economic problem raised by migration is the additional toll imposed on the welfare—state income—distribution institutions. Being unable to exclude migrants from the various entitlement programs and public services, the modern welfare state can find migration rather costly. These two economic considerations may help explain the resistance to migration despite the pure gains—from—trade benefits created by it. Immigration could be more beneficial to the native—born population when the labor markets are better—functioning and the welfare programs are less comprehensive.

Suggested Citation

  • Razin, Assaf & Sadka, Efraim, 1994. "Resisting Migration: Wage Rigidity and Income Distribution," Foerder Institute for Economic Research Working Papers 275597, Tel-Aviv University > Foerder Institute for Economic Research.
    • Handle: RePEc:ags:isfiwp:275597
    DOI: 10.22004/ag.econ.275597
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    References listed on IDEAS

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    1. Nerlove, Marc & Razin, Assaf & Sadka, Efraim & von Weizsacker, Robert K., 1993. "Comprehensive income taxation, investments in human and physical capital, and productivity," Journal of Public Economics, Elsevier, vol. 50(3), pages 397-406, March.
    2. David E. Wildasin, 1994. "Income Redistribution and Migration," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 637-656, August.
    3. J. A. Mirrlees, 1971. "An Exploration in the Theory of Optimum Income Taxation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(2), pages 175-208.
    4. Saint-Paul, Gilles, 1994. "Unemployment, wage rigidity, and the returns to education," European Economic Review, Elsevier, vol. 38(3-4), pages 535-543, April.
    5. George J. Borjas, 1994. "Immigration and Welfare, 1970-1990," NBER Working Papers 4872, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    Financial Economics; International Development; Labor and Human Capital;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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