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High Skilled Immigration Policy and Union Wage Setting

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  • Moritz Bonn

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    Abstract

    This paper studies the effects of high skilled immigration on employment and net income in the host economy where the market for low skilled labor is distorted by union wage setting and a redistributive unemployment benefit scheme. I show that high skilled immigration can increase as well as decrease low skilled employment depending on how the public budget adjusts to immigration and that the effects on workers' net income levels may vary substantially. I conclude that a Pareto improvement can be achieved if the unemployment benefit level remains unaffected by high skilled immigration.

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    File URL: http://www.wiwi.uni-siegen.de/vwl/repec/sie/papers/147-11.pdf
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    Bibliographic Info

    Paper provided by Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht in its series Volkswirtschaftliche Diskussionsbeiträge with number 147-11.

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    Length: 19 pages
    Date of creation: 2011
    Date of revision: 27 Aug 2012
    Handle: RePEc:sie:siegen:147-11

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    Web page: http://www.uni-siegen.de/fb5/vwl/research/diskussionsbeitraege/
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    Related research

    Keywords: Immigration; Imperfect Labor Markets; Fiscal Redistribution;

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    References

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    1. Clemens Fuest & Marcel Thum, 1999. "Immigration and Skill Formation in Unionised Labour Markets," CESifo Working Paper Series 214, CESifo Group Munich.
    2. Frederic DOCQUIER & Çaglar OZDEN & Giovanni PERI, 2010. "The Wage Effects of Immigration and Emigration," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2010044, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    3. Kevin H. O'Rourke & Richard Sinnott, 2004. "The Determinants of Individual Attitudes Towards Immigration," Trinity Economics Papers 20042, Trinity College Dublin, Department of Economics.
    4. Alexander Kemnitz, 2008. "Native Welfare Losses from High Skilled Immigration," CESifo Working Paper Series 2409, CESifo Group Munich.
    5. Giovanni Facchini & Anna Maria Mayda, 2009. "Does the Welfare State Affect Individual Attitudes toward Immigrants? Evidence across Countries," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 295-314, May.
    6. Francesc Ortega & Giovanni Peri, 2009. "The Causes and Effects of International Migrations: Evidence from OECD Countries 1980-2005," NBER Working Papers 14833, National Bureau of Economic Research, Inc.
    7. Giovanni Facchini & Anna Maria Mayda, 2008. "From Individual Attitudes towards Migrants to Migration Policy Outcomes. Theory and Evidence," Development Working Papers 251, Centro Studi Luca d\'Agliano, University of Milano.
    8. Fuest, Clemens & Thum, Marcel, 2000. "Welfare effects of immigration in a dual labor market," Regional Science and Urban Economics, Elsevier, vol. 30(5), pages 551-563, September.
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