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Does Educational Choice Erode the Immigration Surplus?

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  • Wido Geis

Abstract

Many countries pursue an immigration policy that is targeted at attracting high skilled workers. Borjas (1995) has shown that assuming perfect labor markets immigration leads to a welfare gain for the native population, the so-called immigration surplus. Thus, as the labor market for high skilled workers exhibits few frictions, high skilled immigration should lead to a welfare gain. Nevertheless, this argumentation implicitly assumes that immigration has no influence on the qualification structure of natives. In this paper I show that if natives anticipate high skilled immigration, fewer natives acquire a high education level. In labor markets that are not frictionless this effect can be such strong that high skilled immigration leads to a welfare loss for natives. Moreover, if high skilled migration is expected but not realized, this expectation generates a welfare loss.

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Bibliographic Info

Paper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper Nr. 80.

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Date of creation: 2009
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Handle: RePEc:ces:ifowps:_80

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Related research

Keywords: Immigration; native welfare; education structure; immigration surplus.;

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  1. George J. Borjas, 1994. "The Economic Benefits from Immigration," NBER Working Papers 4955, National Bureau of Economic Research, Inc.
  2. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2005. "A Meta-Analytic Assessment of the Effect of Immigration on Wages," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 451-477, 07.
  3. Stark, Oded & Wang, Yong, 2001. "Inducing Human Capital Formation: Migration as a Substitute for Subsidies," Economics Series 100, Institute for Advanced Studies.
  4. Rodney Ramcharan, 2002. "Migration and Human Capital Formation: Theory and Evidence from the U.S. High School Movement," IMF Working Papers 02/123, International Monetary Fund.
  5. Alexander Kemnitz, 2008. "Native Welfare Losses from High Skilled Immigration," CESifo Working Paper Series 2409, CESifo Group Munich.
  6. Razin, A. & Sadka, E., 1992. "Resisting Migration: Wage Rigidity and Income Redistribution," Papers 28-94, Tel Aviv.
  7. Clemens Fuest & Marcel Thum, 1999. "Immigration and Skill Formation in Unionised Labour Markets," CESifo Working Paper Series 214, CESifo Group Munich.
  8. Docquier, Frédéric & Rapoport, Hillel, 2007. "Skilled Migration: The Perspective of Developing Countries," IZA Discussion Papers 2873, Institute for the Study of Labor (IZA).
  9. Gabriel J. Felbermayr & Wilhelm Kohler, 2004. "Immigration and native welfare," Economics working papers 2004-01, Department of Economics, Johannes Kepler University Linz, Austria.
  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. Stephen Drinkwater & Paul Levine & Emanuela Lotti & Joseph Pearlman, 2007. "The Immigration Surplus Revisited In A General Equilibrium Model With Endogenous Growth," Journal of Regional Science, Wiley Blackwell, vol. 47(3), pages 569-601.
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