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Immigration, education and native wage inequality

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  • Lumpe, Christian
  • Weigert, Benjamin

Abstract

In this paper we analyse the effect of immigration on the labour market prospects for different skill groups among natives. We develop a model of endogenous labour supply in which immigration affects educational decisions of natives. We argue that the distributional consequences of immigration with respect to native between-skill-group inequality are ambiguous in general and crucially depend on the host country's level of educational attainment. We show that this result is robust irrespective of labour market institutions as, e.g., with a rigid wage regime featuring unemployment. Additionally, the model is applied to assess the impact on within-skill-group wage inequality. --

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Bibliographic Info

Paper provided by German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung in its series Working Papers with number 01/2010.

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Date of creation: 2010
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Handle: RePEc:zbw:svrwwp:012010

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  1. Alexander Kemnitz, 2008. "Native Welfare Losses from High Skilled Immigration," CESifo Working Paper Series 2409, CESifo Group Munich.
  2. Fuest, Clemens & Thum, Marcel, 2001. "Immigration and skill formation in unionised labour markets," European Journal of Political Economy, Elsevier, vol. 17(3), pages 557-573, September.
  3. Chiswick, Carmel U, 1989. "The Impact of Immigration on the Human Capital of Natives," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 464-86, October.
  4. Card, David, 2004. "Is the New Immigration Really So Bad?," IZA Discussion Papers 1119, Institute for the Study of Labor (IZA).
  5. Greiner, Alfred & Rubart, Jens & Semmler, Willi, 2004. "Economic growth, skill-biased technical change and wage inequality: A model and estimations for the US and Europe," Journal of Macroeconomics, Elsevier, vol. 26(4), pages 597-621, December.
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