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Abstract

The paper analyses the welfare effects of immigration when some sectors of the economy are characterized by wage bargaining between unions and employers. We show that immigration is unambiguously beneficial if the wage elasticity of labor demand in the competitive sectors is smaller than in the unionised sectors. In the opposite case, the welfare effect of immigrat ion is ambiguous; little immigration then reduces the native population's welfare, whereas large scale immigration tends to enhance welfare.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-1999/WP215.PDF
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 215.

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Date of creation: 1999
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Handle: RePEc:ces:ceswps:_215

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Keywords: Immigration policy; trade unions; welfare;

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References

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1. Andrew Oswald, 1984. "Efficient Contracts are on the Labour Demand Curve: Theory and Facts," Working Papers 555, Princeton University, Department of Economics, Industrial Relations Section..
   
   • Oswald, A. J., 1995. "Efficient contracts are on the labour demand curve: Theory and facts," Labour Economics, Elsevier, vol. 2(1), pages 102-102, March.
   • 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.
2. Ken Binmore & Ariel Rubinstein & Asher Wolinsky, 1986. "The Nash Bargaining Solution in Economic Modelling," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 176-188, Summer.
3. 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.
4. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
5. 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.
6. Fuest, Clemens & Thum, Marcel, 2001. "Immigration and skill formation in unionised labour markets," European Journal of Political Economy, Elsevier, vol. 17(3), pages 557-573, September.
   
   • Clemens Fuest & Marcel Thum, 1999. "Immigration and Skill Formation in Unionised Labour Markets," CESifo Working Paper Series 214, CESifo Group Munich.

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Cited by:

1. Moritz Bonn, 2011. "High Skilled Immigration Policy and Union Wage Setting," Volkswirtschaftliche Diskussionsbeiträge 147-11, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht, revised 27 Aug 2012.
2. Alexander Kemnitz, 2005. "Can Immigrant Employment Alleviate the Demographic Burden? The Role of Union Centralization," CESifo Working Paper Series 1525, CESifo Group Munich.
   
   • Kemnitz, Alexander, 2008. "Can immigrant employment alleviate the demographic burden? The role of union centralization," Economics Letters, Elsevier, vol. 99(1), pages 123-126, April.
   • Kemnitz, Alexander, 2006. "Can Immigrant Employment Alleviate the Demographic Burden? The Role of Union Centralization," Dresden Discussion Paper Series in Economics 13/06, Dresden University of Technology, Faculty of Business and Economics, Department of Economics.
   • Kemnitz, Alexander, 2005. "Can Immigrant Employment Alleviate the Demographic Burden? The Role of Union Centralization," Discussion Papers 616, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
3. Moritz Bonn, 2011. "The Effects of High Skilled Immigration in a Dual Labour Market with Union Wage Setting and Fiscal Redistribution," MAGKS Papers on Economics 201121, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
4. Kemnitz, Alexander, 2003. "Unemployment, Technology and the Welfare Effects of Immigration," Discussion Papers 611, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
5. Clemens Fuest & Marcel Thum, 1999. "Immigration and Skill Formation in Unionised Labour Markets," CESifo Working Paper Series 214, CESifo Group Munich.
   
   • Fuest, Clemens & Thum, Marcel, 2001. "Immigration and skill formation in unionised labour markets," European Journal of Political Economy, Elsevier, vol. 17(3), pages 557-573, September.
6. 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.
   
   • Puhani, Patrick A. & Frölich, Markus, 2002. "Immigration and Heterogeneous Labor in Western Germany: A Labor Market Classification Based on Nonparametric Estimation," ZEW Discussion Papers 02-01, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
7. Clemens Fuest & Marcel Thum, 2001. "Zuwanderungsgewinne bei unvollständigen Arbeitsmärkten?," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 54(08), pages 28-31, 05.
8. König, Jan & Skupnik, Christoph, 2012. "Labor market integration of migrants: Hidden costs and benefits in two-tier welfare states," Discussion Papers 2012/5, Free University Berlin, School of Business & Economics.
9. Kondoh Kenji, 2004. "Temporary and Permanent Immigration under Unionization," ERSA conference papers ersa04p58, European Regional Science Association.
   
   • Laixun Zhao & Kenji Kondoh, 2007. "Temporary and Permanent Immigration under Unionization," Review of Development Economics, Wiley Blackwell, vol. 11(2), pages 346-358, 05.
10. Alexander Kemnitz, 2006. "Immigration as a commitment device," Journal of Population Economics, Springer, vol. 19(2), pages 299-313, June.
    
    • Kemnitz, Alexander, 2004. "Immigration as a Commitment Device," Discussion Papers 614, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
11. Chletsos, Michael & Roupakias, Stelios, 2012. "Immigration, Unemployment and Growth: Empirical Evidence from Greece," MPRA Paper 39861, University Library of Munich, Germany.

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