This paper explores the effects of high and low skilled immigration to a host country with unionized low skilled labor and an unemployment insurance scheme. It is shown that the consequences for the labor market and the welfare of natives depend crucially on the host country's production structure. When high and low skilled labor are close substitutes, low skilled immigration boosts employment and can increase total native income. We provide conditions under which low skilled immigration is Pareto-improving. While high skilled immigration has adverse employment effects, the Endings reverse for the case of close complementarity.
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Paper provided by Institut für Volkswirtschaft und Statistik (IVS), University of Mannheim in its series IVS discussion paper series with number
611.
Length: Date of creation: Date of revision: Handle: RePEc:mea:ivswpa:611
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Find related papers by JEL classification: F22 - International Economics - - International Factor Movements and International Business - - - International Migration J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings
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