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The Immigration Surplus Revisited in a General Equilibrium Model with Endogenous Growth

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Author Info
Paul Levine (University of Surrey)
Emanuela Lotti (University of Surrey)
Joseph Pearlman (London Guildhall University)

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Abstract

We revisit the work of Borjas (1995) which has provided an influential positive theory of immigration policy. An important feature of his framework is the focus on the skill-composition of immigrants and we retain this feature in our paper. Our contribution to this literature is to extend his analysis in a number of directions. First, we study the immigration surplus in the context of a general equilibrium model in which capital is endogenous and the welfare of the indigenous population is set out explicitly. Second, we introduce several sectors into the model so that changing the skill composition leads to changes in sector shares. Third, related to the second development, we introduce and R&D sector and develop a model with long-term endogenous growth. The result is that growth effects on the Immigration Surplus come to dominate the purely static effects in the original analysis of Borjas, but they are not sufficient to eliminate the emergence of losers among the section of natives competing with immigrants in the labour market.

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Paper provided by Department of Economics, University of Surrey in its series Department of Economics Discussion Papers with number 0203.

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Length: 47 pages
Date of creation: Jan 2003
Date of revision:
Handle: RePEc:sur:surrec:0203

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Related research
Keywords: immigration surplus; economic growth; income distribution;

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Find related papers by JEL classification:
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

References listed on IDEAS
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  1. Fabio Canova & Eva Ortega, 1996. "Testing Calibrated General Equilibrium Models," Economics Working Papers 166, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
  2. Canova, Fabio, 1994. "Statistical Inference in Calibrated Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 9(S), pages S123-44, Suppl. De. [Downloadable!] (restricted)
  3. Segerstrom, Paul S, 1998. "Endogenous Growth without Scale Effects," American Economic Review, American Economic Association, vol. 88(5), pages 1290-1310, December. [Downloadable!] (restricted)
  4. Fabio Canova & Morten O. Ravn, 2000. "The Macroeconomic Effects of German Unification: Real Adjustments and the Welfare State," Economics Working Papers 442, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
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  5. Lucas Bretschger, 2001. "Labor Supply, Migration, and Long-Term Development," Open Economies Review, Springer, vol. 12(1), pages 5-27, January. [Downloadable!] (restricted)
  6. Li, Chol-Won, 2000. "Endogenous vs. Semi-endogenous Growth in a Two-R&D-Sector Model," Economic Journal, Royal Economic Society, vol. 110(462), pages C109-22, March. [Downloadable!] (restricted)
  7. Chui, Michael & Levine, Paul L & Pearlman, Joseph, 1999. "Winners and Losers in a North-South Model of Growth, Innovation and Product Cycles," CEPR Discussion Papers 2291, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  8. Borjas, George J, 1995. "The Economic Benefits from Immigration," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 3-22, Spring. [Downloadable!] (restricted)
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  9. Lundborg, Per & Segerstrom, Paul S., 1998. "The Growth and Welfare Effects of International Mass Migration," Working Paper Series 146, Trade Union Institute for Economic Research. [Downloadable!]
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  10. Masao Ogaki & Carmen M. Reinhart, 1998. "Measuring Intertemporal Substitution: The Role of Durable Goods," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 1078-1098, October. [Downloadable!] (restricted)
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  11. Michael C. Burda & Jennifer Hunt, 2001. "From Reunification to Economic Integration: Productivity and the Labor Market in Eastern Germany," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(2001-2), pages 1-92. [Downloadable!]
  12. Stephen L. Parente & Edward C. Prescott, 2002. "Barriers to Riches," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661306.
  13. Lundborg, Per & Segerstrom, Paul S, 2000. "International Migration and Growth in Developed Countries: A Theoretical Analysis," Economica, London School of Economics and Political Science, vol. 67(268), pages 579-604, November. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Stephen Drinkwater & Paul Levine & Emanuela Lotti & Joseph Pearlman, 2003. "The Economic Impact of Migration: A Survey," Department of Economics Discussion Papers 0103, Department of Economics, University of Surrey. [Downloadable!]
  2. Wido Geis, 2009. "Does Educational Choice Erode the Immigration Surplus?," Ifo Working Paper Series Ifo Working Paper Nr. 80, Ifo Institute for Economic Research at the University of Munich. [Downloadable!]
  3. Sari Pekkala, 2005. "Economic Impacts of Immigration: A Survey," Discussion Papers 362, Government Institute for Economic Research Finland (VATT). [Downloadable!]
  4. Jacques Poot, 2007. "Demographic Change and Regional Competitiveness: The Effects of Immigration and Ageing," Population Studies Centre Discussion Papers dp-64, University of Waikato, Population Studies Centre. [Downloadable!]
  5. Cat Moody, 2006. "Migration and Economic Growth: a 21st Century Perspective," Treasury Working Paper Series 06/02, New Zealand Treasury. [Downloadable!]
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