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Effects of migration with endogenous labor supply and heterogeneous skills

Author

Listed:
  • Gianfranco E. Atzeni
  • LG Deidda
  • M. Delogu
  • D. Paolini

Abstract

We analyze the effects of migration allowing for endogenous labor supply in a standard two-region model with monopolistically competitive producers and love for variety. We find that the welfare effects of migration depend on firms' market power in the final good markets. If market power is sufficiently high, migration of low-skill individuals positively affects the welfare of native high skill individuals in the destination region, while low skill individuals are unaffected. Natives of the origin region are always better off, irrespective of their skills. Differently, if market power is sufficiently low, low skill migration makes both high and low individuals native of the destination region better off.

Suggested Citation

  • Gianfranco E. Atzeni & LG Deidda & M. Delogu & D. Paolini, 2021. "Effects of migration with endogenous labor supply and heterogeneous skills," Working Paper CRENoS 202111, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    • Handle: RePEc:cns:cnscwp:202111
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    More about this item

    Keywords

    Welfare Analysis; Monopolistic Competition; migration; Labor Supply;
    All these keywords.

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