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Are Migration Policies that Induce Skilled (Unskilled) Migration Beneficial (Harmful) for the Host Country?

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  • Michael S. Michael

Abstract

This paper investigates the welfare consequences of immigration policies in a model with two types of labour, skilled and unskilled, and international capital mobility. The paper examines the effect of government policies – which change the immigration cost and causes immigration of one type of labour – on the welfare of natives when the other type of labour and/or capital are also mobile. It is shown that in the absence of capital mobility, if skilled and unskilled labour are highly complementary in production (as attested by many empirical studies), then a decrease in the immigration cost of the net fiscal contributor skilled labour decreases the welfare of natives.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2006/wp-cesifo-2006-09/cesifo1_wp1814.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1814.

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Date of creation: 2006
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Handle: RePEc:ces:ceswps:_1814

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Keywords: migration policies; skilled and unskilled labour; capital mobility; welfare;

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References

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  1. Assaf Razin & Efraim Sadka, 2004. "Welfare Migration: Is the Net Fiscal Burden a Good Measure of Its Economic Impact on the Welfare of the Native Born Population?," NBER Working Papers 10682, National Bureau of Economic Research, Inc.
  2. Razin, A. & Sadka, E. & Swagel, P., 1998. "Tax Burden and Migration: a Political Economy Theory and Evidence," Papers 15-98, Tel Aviv.
  3. Bauer, Thomas & Kunze, Astrid, 2004. "The Demand for High-Skilled Workers and Immigration Policy," CEPR Discussion Papers 4274, C.E.P.R. Discussion Papers.
  4. David E. Wildasin, 1994. "Income Redistribution and Migration," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 637-56, August.
  5. Bucovetsky, S., 2003. "Efficient migration and redistribution," Journal of Public Economics, Elsevier, vol. 87(11), pages 2459-2474, October.
  6. Michael S. Michael, 2002. "International Migration, Income Taxes and Transfers: A Welfare Analysis," CESifo Working Paper Series 780, CESifo Group Munich.
  7. Alexander Kemnitz, 2003. "Immigration, Unemployment and Pensions," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(1), pages 31-48, 03.
  8. Wellisch, Dietmar & Wildasin, David E., 1996. "Decentralized income redistribution and immigration," European Economic Review, Elsevier, vol. 40(1), pages 187-217, January.
  9. David E. Wildasin, 2004. "Economic Integration and the Welfare State," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 5(3), pages 19-26, 09.
  10. Berry, R Albert & Soligo, Ronald, 1969. "Some Welfare Aspects of International Migration," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 778-94, Sept./Oct.
  11. Epstein, Gil S. & Hillman, Arye L., 2003. "Unemployed immigrants and voter sentiment in the welfare state," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1641-1655, August.
  12. G. Bellettini & C. Berti Ceroni, 2003. "Opening the borders: immigration policy, migrants' selection and human capital accumulation," Working Papers 473, Dipartimento Scienze Economiche, Universita' di Bologna.
  13. Razin, A. & Sadka, E., 1992. "Resisting Migration: Wage Rigidity and Income Redistribution," Papers 28-94, Tel Aviv.
  14. Michael, Michael S. & Hatzipanayotou, Panos, 2001. "Welfare effects of migration in societies with indirect taxes, income transfers and public good provision," Journal of Development Economics, Elsevier, vol. 64(1), pages 1-24, February.
  15. M. G. Quibria, 1988. "On Generalizing the Economic Analysis of International Migration: A Note," Canadian Journal of Economics, Canadian Economics Association, vol. 21(4), pages 874-76, November.
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Cited by:
  1. Alexander Kemnitz, 2009. "Native welfare losses from high skilled immigration," International Tax and Public Finance, Springer, vol. 16(4), pages 560-570, August.

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