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Native Welfare Losses from High Skilled Immigration

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  • Alexander Kemnitz

Abstract

This paper explores the effects of high skilled immigration to a host country with unionized low skilled labor and an unemployment insurance scheme. We show that such immigration can create a negative immigration surplus due to adverse effects on low skilled employment, provided that fiscal redistribution is not too intense and the elasticity between high and low skilled labor is high as empirical evidence suggests.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2008/wp-cesifo-2008-09/cesifo1_wp2409.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2409.

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Date of creation: 2008
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Handle: RePEc:ces:ceswps:_2409

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Keywords: immigration; trade union; unemployment; welfare state; elasticity of substitution;

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References

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  1. Kjetil Storesletten, 2000. "Sustaining Fiscal Policy through Immigration," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 108(2), pages 300-323, April.
  2. Eggert, Wolfgang & Krieger, Tim & Meier, Volker, 2010. "Education, unemployment and migration," Munich Reprints in Economics, University of Munich, Department of Economics 20561, University of Munich, Department of Economics.
  3. Michael S. Michael, 2006. "Are Migration Policies that Induce Skilled (Unskilled) Migration Beneficial (Harmful) for the Host Country?," CESifo Working Paper Series 1814, CESifo Group Munich.
  4. David Card & Thomas Lemieux, 2000. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," NBER Working Papers 7655, National Bureau of Economic Research, Inc.
  5. Schmitt, Nicolas & Soubeyran, Antoine, 2006. "A simple model of brain circulation," Journal of International Economics, Elsevier, Elsevier, vol. 69(2), pages 296-309, July.
  6. Holger Bonin & Bernd Raffelhüschen & Jan Walliser, . "Can Immigration Alleviate the Demographic Burden?," EPRU Working Paper Series, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics 99-17, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  7. Alexander Haupt & Eckhard Janeba, 2009. "Education, redistribution and the threat of brain drain," International Tax and Public Finance, Springer, Springer, vol. 16(1), pages 1-24, February.
  8. Razin, Assaf & Sadka, Efraim, 1999. "Migration and pension with international capital mobility," Journal of Public Economics, Elsevier, Elsevier, vol. 74(1), pages 141-150, October.
  9. Poutvaara, Panu, 2000. "Education, mobility of labour and tax competition," Munich Reprints in Economics, University of Munich, Department of Economics 19303, University of Munich, Department of Economics.
  10. Andersson, Fredrik & Konrad, Kai A, 2003. "Globalization and Risky Human-Capital Investment," International Tax and Public Finance, Springer, Springer, vol. 10(3), pages 211-28, May.
  11. repec:pdn:wpaper:7 is not listed on IDEAS
  12. David E. Wildasin, 2000. "Labor-Market Integration, Investment in Risky Human Capital, and Fiscal Competition," American Economic Review, American Economic Association, American Economic Association, vol. 90(1), pages 73-95, March.
  13. Bhagwati, Jagdish & Hamada, Koichi, 1974. "The brain drain, international integration of markets for professionals and unemployment : A theoretical analysis," Journal of Development Economics, Elsevier, Elsevier, vol. 1(1), pages 19-42, April.
  14. George J. Borjas & Jeffrey Grogger & Gordon H. Hanson, 2008. "Imperfect Substitution between Immigrants and Natives: A Reappraisal," NBER Working Papers 13887, National Bureau of Economic Research, Inc.
  15. George E. Johnson, 1997. "Changes in Earnings Inequality: The Role of Demand Shifts," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 11(2), pages 41-54, Spring.
  16. Chiswick, Barry R., 2005. "High Skilled Immigration in the International Arena," IZA Discussion Papers 1782, Institute for the Study of Labor (IZA).
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Citations

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Cited by:
  1. Wido Geis, 2009. "Does Educational Choice Erode the Immigration Surplus?," Ifo Working Paper Series Ifo Working Paper Nr. 80, Ifo Institute for Economic Research at the University of Munich.
  2. Lumpe, Christian & Weigert, Benjamin, 2010. "Immigration, education and native wage inequality," Working Papers 01/2010, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
  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, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) 201121, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  4. Moritz Bonn, 2011. "High Skilled Immigration Policy and Union Wage Setting," Volkswirtschaftliche Diskussionsbeiträge, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht 147-11, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht, revised 27 Aug 2012.

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