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A Search-Equilibrium Approach to the Effects of Immigration on Labor Market Outcomes

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  • Chassamboulli, Andri
  • Palivos, Theodore

Abstract

We analyze the impact of the skill-biased immigration influx that took place during the years 2000-2009 in the United States, within a search and matching model that allows for skill heterogeneity, differential search cost between immigrants and natives, capital-skill complementarity and possibly endogenous skill acquisition. Within such a framework, we find that although the skill-biased immigration raised the overall net income to natives, it may have had distributional effects. Specifically, unskilled native workers gained in terms of both employment and wages. Skilled native workers, on the other hand, gained in terms of employment but may have lost in terms of wages. Nevertheless, in one extension of the model, where skilled workers and immigrants are imperfect substitutes, we find that even the skilled wage may have risen.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 43297.

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Date of creation: 15 May 2012
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Handle: RePEc:pra:mprapa:43297

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Keywords: Immigration; Search; Unemployment; Skill-heterogeneity;

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  1. Frédéric Docquier & Çaǧlar Özden & Giovanni Peri, 2010. "The Wage Effects of Immigration and Emigration," NBER Working Papers 16646, National Bureau of Economic Research, Inc.
  2. Christopher A. Pissarides, 2007. "The Unemployment Volatility Puzzle: Is Wage Stickiness the Answer?," CEP Discussion Papers, Centre for Economic Performance, LSE dp0839, Centre for Economic Performance, LSE.
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  4. Per Krusell & Lee E. Ohanian & Jose-Victor Rios-Rull & Giovanni L. Violante, 1997. "Capital-skill complementarity and inequality: a macroeconomic analysis," Staff Report, Federal Reserve Bank of Minneapolis 239, Federal Reserve Bank of Minneapolis.
  5. David Card, 2009. "Immigration and Inequality," American Economic Review, American Economic Association, American Economic Association, vol. 99(2), pages 1-21, May.
  6. Moy, Hon Man & Yip, Chong K., 2006. "The simple analytics of optimal growth with illegal migrants: A clarification," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 30(12), pages 2469-2475, December.
  7. Hosios, Arthur J, 1990. "On the Efficiency of Matching and Related Models of Search and Unemployment," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 57(2), pages 279-98, April.
  8. Theodore Palivos, 2007. "Welfare effects of illegal immigration," Discussion Paper Series 2007_01, Department of Economics, University of Macedonia, revised Dec 2007.
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  14. Barbara Petrongolo & Christopher Pissarides, 2000. "Looking into the black box: a survey of the matching function," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 2122, London School of Economics and Political Science, LSE Library.
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  17. Liu, Xiangbo, 2009. "On the Macroeconomic and Welfare Effects of Illegal Immigration," MPRA Paper 15469, University Library of Munich, Germany.
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  23. Ortega, Javier, 2000. "Pareto-Improving Immigration in an Economy with Equilibrium Unemployment," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 110(460), pages 92-112, January.
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  25. George J. Borjas & Jeffrey Grogger & Gordon H. Hanson, 2008. "Imperfect Substitution between Immigrants and Natives: A Reappraisal," NBER Working Papers 13887, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Liu, Xiangbo & Palivos, Theodore & Zhang, Xiaomeng, 2014. "Immigration, Skill Heterogeneity and Qualification Mismatch," MPRA Paper 57981, University Library of Munich, Germany.
  2. Dai, Tiantian & Liu, Xiangbo & Xie, Biancen, 2013. "The impact of immigrants on host country crime," Economics Letters, Elsevier, Elsevier, vol. 119(2), pages 157-161.
  3. Mette Foged & Giovanni Peri, 2013. "Immigrants and Native Workers: New Analysis Using Longitudinal Employer-Employee Data," NBER Working Papers 19315, National Bureau of Economic Research, Inc.
  4. Andri Chassamboulli & Theodore Palivos, 2013. "The impact of immigration on the employment and wages of native workers," Working Papers, Bank of Greece 160, Bank of Greece.
  5. Cristina Cattaneo & Carlo V. Fiorio & Giovanni Peri, 2014. "What Happens to the Careers of European Workers when Immigrants "Take their Jobs"?," Working Papers, Fondazione Eni Enrico Mattei 2014.54, Fondazione Eni Enrico Mattei.
  6. Michele Battisti & Gabriel Felbermayr & Giovanni Peri & Panu Poutvaara, 2014. "Immigration, Search, and Redistribution: A Quantitative Assessment of Native Welfare," NBER Working Papers 20131, National Bureau of Economic Research, Inc.

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