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The Immigration Surplus Revisited In A General Equilibrium Model With Endogenous Growth

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  • Stephen Drinkwater
  • Paul Levine
  • Emanuela Lotti
  • Joseph Pearlman

Abstract

We revisit the influential work of Borjas (1995) on the economic gain to the host population from immigration-"the immigration surplus." We develop his analysis by using a general equilibrium endogenous growth model with endogenous capital and several sectors, including an R&D sector driving growth. Skilled immigration leads to a bigger R&D sector share resulting in higher long-term growth. If skilled labor and physical capital are complements, this growth gain increases. Growth effects on the immigration surplus dominate the purely static effects of Borjas, but are not sufficient to eliminate the emergence of losers (skilled natives) within the host population. Copyright Blackwell Publishing, Inc. 2007

Suggested Citation

  • Stephen Drinkwater & Paul Levine & Emanuela Lotti & Joseph Pearlman, 2007. "The Immigration Surplus Revisited In A General Equilibrium Model With Endogenous Growth," Journal of Regional Science, Wiley Blackwell, vol. 47(3), pages 569-601.
  • Handle: RePEc:bla:jregsc:v:47:y:2007:i:3:p:569-601
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Sari Pekkala Kerr & William R. Kerr, 2011. "Economic Impacts of Immigration: A Survey," Finnish Economic Papers, Finnish Economic Association, vol. 24(1), pages 1-32, Spring.
    2. Clark, Ken & Drinkwater, Stephen, 2013. "UK Migration Policy and Migration from Eastern Partnership Countries," IZA Discussion Papers 7665, Institute for the Study of Labor (IZA).
    3. David de la Croix & Frederic Docquier, 2015. "An Incentive Mechanism to Break the Low-skill Immigration Deadlock," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(3), pages 593-618, July.
    4. Ken Clark & Stephen Drinkwater, 2014. "Labour migration to the UK from Eastern partnership countries," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-19, December.
    5. Ayoung Kim & Brigitte S. Waldorf & Natasha T. Duncan, 2017. "U.S. Immigration and Policy Brain Waste," Working papers 262884, Purdue University, Department of Agricultural Economics.
    6. Isaac Ehrlich & Jinyoung Kim, 2015. "Immigration, Human Capital Formation, and Endogenous Economic Growth," Journal of Human Capital, University of Chicago Press, vol. 9(4), pages 518-563.
    7. Paul Levine & Emanuela Lotti & Joseph Pearlman & Richard Pierse, 2007. "Growth and Welfare Effects of East-West European Migration," School of Economics Discussion Papers 1507, School of Economics, University of Surrey.
    8. Stephen Drinkwater & Paul Levine & Emanuela Lotti & Joseph Pearlman, 2003. "The Economic Impact of Migration: A Survey," School of Economics Discussion Papers 0103, School of Economics, University of Surrey.
    9. Paul Levine & Emanuela Lotti & Joseph Pearlman & Richard Pierse, 2010. "Growth And Welfare Effects Of World Migration," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(5), pages 615-643, November.
    10. Wido Geis, 2009. "Does Educational Choice Erode the Immigration Surplus?," ifo Working Paper Series 80, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    11. Xavier Chojnicki & Frédéric Docquier & Lionel Ragot, 2011. "Should the US have locked heaven’s door?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(1), pages 317-359, January.
    12. repec:ris:integr:0725 is not listed on IDEAS
    13. Erik Hornung, 2014. "Immigration and the Diffusion of Technology: The Huguenot Diaspora in Prussia," American Economic Review, American Economic Association, vol. 104(1), pages 84-122, January.
    14. 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.
    15. Cat Moody, 2006. "Migration and Economic Growth: a 21st Century Perspective," Treasury Working Paper Series 06/02, New Zealand Treasury.
    16. Oscar Afonso & Susana Gabriel & Pedro Mazeda Gil, 2016. "Could immigration explain wage inequality in a skill-biased technological model?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 43(3), pages 559-577, August.
    17. Erik Hornung, 2012. "Human Capital, Technology Diffusion, and Economic Growth - Evidence from Prussian Census Data," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 46.

    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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