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Immigration and Skill Formation in Unionised Labour Markets

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Author Info
Fuest, Clemens
Thum, Marcel

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Abstract

This paper analyses the impact of immigration on the welfare of the native population in an economy that consists of skilled and unskilled workers. Due to unionisation, the wage rate in the market for unskilled labour is above the competitive level. For a given skill endowment of the native population, we show that immigration reduces the welfare of the host country up to a certain threshold and then increases it with further immigration. For the case of endogenous skill formation, an increase in expected immigration raises the number of skilled individuals in the native population. If the government can credibly commit itself to a certain immigration policy, skill formation of the native population will adjust, so that immigration maybe strictly welfare increasing.

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Publisher Info
Paper provided by CESifo GmbH in its series CESifo Working Paper Series with number CESifo Working Paper No. 214.

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Date of creation: 1999
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Handle: RePEc:ces:ceswps:_214

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Keywords: Immigration policy trade unions occupational choice

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Find related papers by JEL classification:
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Oswald, Andrew J., 1993. "Efficient contracts are on the labour demand curve : Theory and facts," Labour Economics, Elsevier, vol. 1(1), pages 85-113, June. [Downloadable!] (restricted)
    Other versions:
  2. Topel, Robert H, 1997. "Factor Proportions and Relative Wages: The Supply-Side Determinants of Wage Inequality," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 55-74, Spring. [Downloadable!] (restricted)
  3. Layard, Richard & Nickell, Stephen, 1990. "Is Unemployment Lower if Unions Bargain over Employment?," The Quarterly Journal of Economics, MIT Press, vol. 105(3), pages 773-87, August. [Downloadable!] (restricted)
    Other versions:
  4. Strand, Jon, 1989. "Monopoly unions versus efficient bargaining : A repeated game approach," European Journal of Political Economy, Elsevier, vol. 5(4), pages 473-486. [Downloadable!] (restricted)
  5. Fuest, Clemens & Thum, Marcel, 1999. "Welfare Effects of Immigration in a Dual Labor Market," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  6. Burda, Michael C & Funke, Michael, 1991. "German Trade Unions After Unification: Third Degree Wage Discriminating Monopolists?," CEPR Discussion Papers 573, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  7. Schmidt, Christoph M. & Stilz, Anette & Zimmermann, Klaus F., 1994. "Mass migration, unions, and government intervention," Journal of Public Economics, Elsevier, vol. 55(2), pages 185-201, October. [Downloadable!] (restricted)
  8. Paz Espinosa, Maria & Rhee, Changyong, 1989. "Efficient Wage Bargaining as a Repeated Game," The Quarterly Journal of Economics, MIT Press, vol. 104(3), pages 565-88, August. [Downloadable!] (restricted)
  9. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April. [Downloadable!] (restricted)
  10. Oswald, Andrew, 1996. "Rent-Sharing in the Labor Market," The Warwick Economics Research Paper Series (TWERPS) 474, University of Warwick, Department of Economics.
  11. 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. [Downloadable!] (restricted)
  12. Brecher, Richard A. & Choudhri, Ehsan U., 1987. "International migration versus foreign investment in the presence of unemployment," Journal of International Economics, Elsevier, vol. 23(3-4), pages 329-342, November. [Downloadable!] (restricted)
  13. Abowd, John M & Lemieux, Thomas, 1993. "The Effects of Product Market Competition on Collective Bargaining Agreements: The Case of Foreign Competition in Canada," The Quarterly Journal of Economics, MIT Press, vol. 108(4), pages 983-1014, November. [Downloadable!] (restricted)
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  14. Gilles Saint-Paul, 1994. "Searching for the Virtues of the European Model," IMF Working Papers 94/46, International Monetary Fund.
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  15. Agell, Jonas & Lommerud, Kjell Erik, 1997. "Minimum wages and the incentives for skill formation," Journal of Public Economics, Elsevier, vol. 64(1), pages 25-40, April. [Downloadable!] (restricted)
  16. Bauer, T. & Zimmermann, K., 1995. "Integrating the East: The Labor Market Effects of Immigration," Papers 5, American Institute for Contemporary German Studies-.
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  17. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Fröhlich, Markus & Puhani, Patrick A, 2002. "Immigration and Heterogeneous Labour in Western Germany: A Labour Market Classification Based on Nonparametric Estimation," CEPR Discussion Papers 3158, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. Alexander Kemnitz, . "Immigration as a Commitment Device," IVS discussion paper series 614, Institut für Volkswirtschaft und Statistik (IVS), University of Mannheim. [Downloadable!]
    Other versions:
  3. Fuest, Clemens & Thum, Marcel, 1999. "Welfare Effects of Immigration in a Dual Labor Market," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  4. Kondoh Kenji, 2004. "Temporary and Permanent Immigration under Unionization," ERSA conference papers ersa04p58, European Regional Science Association. [Downloadable!]
  5. Giorgio Bellettini & Carlotta Berti Ceroni, 2005. "When the Union Hurts the Workers: A Positive Analysis of Immigration Policy," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  6. Tamura, Yuji, 2004. "Referendum-Led Immigration Policy In The Welfare State," The Warwick Economics Research Paper Series (TWERPS) 713, University of Warwick, Department of Economics. [Downloadable!]
  7. Alessandra Venturini & Gil S. Epstein, 2006. "Migration, effort, and voter sentiment towards temporary migration," CHILD Working Papers wp18_06, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY. [Downloadable!]
  8. Christian Lumpe & Benjamin Weigert, 2004. "Immigration, Education and Labour Market Institutions," Working Papers of the Research Group Heterogenous Labor 04-14, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim. [Downloadable!]
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This page was last updated on 2008-9-22.

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