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Immigration, Education and Wage Inequality

Author

Listed:
  • Lumpe, Christian

    () (Justus-Liebig-University Gießen)

  • Weigert, Benjamin

    () (Justus-Liebig-University Gießen)

Abstract

In this paper we analyse the effect of immigration on the labour market prospects of 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 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.

Suggested Citation

  • Lumpe, Christian & Weigert, Benjamin, 2010. "Immigration, Education and Wage Inequality," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 25, pages 592-612.
  • Handle: RePEc:ris:integr:0517
    as

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    More about this item

    Keywords

    Human-capital Investment; Immigration; Wage Inequality; Heterogeneity; Labour Market;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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