Simulating the impact of immigration on wages and unemployment
This paper looks at the e¤ects of migration in labour market models that allow for un-employment in equilibrium. We include three di¤erent models: a competitive labour market model, a wage bargaining model and an e¢ ciency wage model. We simulate a one-percentage point increase in the labour force due to migration. Simulation results show that e¤ects of migration do not di¤er that much between di¤erent labour market models: wages decrease with 0.3% to 0.4% and the unemployment rate increases with at most 0.24 percentage points. Migration also positively a¤ects public .nancing by increasing government.s budget with 0.3% to 0.5%.
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