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How (Good) Immigration is: a matching analysis

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

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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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File URL: http://www.iies.su.se/publications/seminarpapers/618.pdf
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Publisher Info
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
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Publication status: Published in Economic Journal, 2000, pages 1-21.
Handle: RePEc:hhs:iiessp:0618

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Postal: Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden
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Related research
Keywords: immmigration migration labour Nash bargaining multiple steady-state equilibria Pareto efficiency

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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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  2. Persson, Mats, 2000. "Five Fallacies in the Social Security Debate," Seminar Papers 686, Stockholm University, Institute for International Economic Studies. [Downloadable!]
  3. Taylor, John B., 1998. "The Robustness and Efficiency of Monetary Policy Rules as Guidelines for Interest Rate Setting by the European Central Bank," Seminar Papers 649, Stockholm University, Institute for International Economic Studies. [Downloadable!]
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  4. Lindbeck, Assar, 1998. "Swedish Lessons for Post-Socialist Countries," Seminar Papers 645, Stockholm University, Institute for International Economic Studies. [Downloadable!]
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  5. Lindbeck, Assar & Wikström, Solveig, 1999. "The ICT Revolution in Consumer Product Markets," Seminar Papers 670, Stockholm University, Institute for International Economic Studies. [Downloadable!]
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  6. Svensson, Lars, 2000. "The first Year of the Eurosystem: Inflation Targeting or Not?," Seminar Papers 681, Stockholm University, Institute for International Economic Studies. [Downloadable!]
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  7. Lindbeck, Assar, 2000. "Pensions and Contemporary Socioeconomic Change," Seminar Papers 685, Stockholm University, Institute for International Economic Studies. [Downloadable!]
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