How (Good) Immigration is: a matching analysis

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How (Good) Immigration is: a matching analysis

Author Info

Ortega, Javier (Departement d'Economia, Universitat Pompeu Fabra)

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Javier Ortega

Abstract

We present a dynamic two-country labour matching economy. Workers decide whether to search in their native country (paying a small cost) or to look for a job abroad (bearing an additional cost). Firms choose the number of vacancies they post in each country according to the average workers' characteristics inside it. Wages are determined in an individual Nash bargaining. We show the existence of multiple steady-state equilibria : a no-migration equilibrium and two migration equilibria. The multiplicity of equilibria comes from a self-fulfilling prophecy phenomenon linking average wages and incentives to migration. The equilibria are Pareto-ranked, with migration-equilibria dominating no-migration.

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Paper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number 618.

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Length: 30 pages
Date of creation: 30 Oct 1997
Date of revision:
Publication status: Published in Economic Journal, 2000, pages 1-21.
Handle: RePEc:hhs:iiessp:0618

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Paper
- Ortega, J, 1996. "How (Godd) Immigration Is : A Matching Analysis," Papers 618, Stockholm - International Economic Studies.

Find related papers by JEL classification:
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers

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