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Are Migration Policies that Induce Skilled (Unskilled) Migration Beneficial (Harmful) for the Host Country?

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  • Michael S. Michael

Abstract

This paper investigates the welfare consequences of immigration policies in a model with two types of labour, skilled and unskilled, and international capital mobility. The paper examines the effect of government policies – which change the immigration cost and causes immigration of one type of labour – on the welfare of natives when the other type of labour and/or capital are also mobile. It is shown that in the absence of capital mobility, if skilled and unskilled labour are highly complementary in production (as attested by many empirical studies), then a decrease in the immigration cost of the net fiscal contributor skilled labour decreases the welfare of natives.

Suggested Citation

  • Michael S. Michael, 2006. "Are Migration Policies that Induce Skilled (Unskilled) Migration Beneficial (Harmful) for the Host Country?," CESifo Working Paper Series 1814, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_1814
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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp1814.pdf
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    References listed on IDEAS

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    1. Thomas K. Bauer & Astrid Kunze, 2004. "The demand for high-skilled workers and immigration policy," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 47(1), pages 77-88.
    2. David E. Wildasin, 2004. "Economic Integration and the Welfare State," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 5(3), pages 19-26, September.
    3. Epstein, Gil S. & Hillman, Arye L., 2003. "Unemployed immigrants and voter sentiment in the welfare state," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1641-1655, August.
    4. Michael, Michael S., 2003. "International migration, income taxes and transfers: a welfare analysis," Journal of Development Economics, Elsevier, vol. 72(1), pages 401-411, October.
    5. Razin, Assaf & Sadka, Efraim & Swagel, Phillip, 2002. "Tax burden and migration: a political economy theory and evidence," Journal of Public Economics, Elsevier, vol. 85(2), pages 167-190, August.
    6. Razin, Assaf & Sadka, Efraim, 1995. "Resisting Migration: Wage Rigidity and Income Distribution," American Economic Review, American Economic Association, vol. 85(2), pages 312-316, May.
    7. Berry, R Albert & Soligo, Ronald, 1969. "Some Welfare Aspects of International Migration," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 778-794, Sept./Oct.
    8. M. G. Quibria, 1988. "On Generalizing the Economic Analysis of International Migration: A Note," Canadian Journal of Economics, Canadian Economics Association, vol. 21(4), pages 874-876, November.
    9. Assaf Razin & Efraim Sadka, 2004. "Welfare Migration: Is the Net Fiscal Burden a Good Measure of its Economic Impact on the Welfare of the Native-Born Population?," CESifo Economic Studies, CESifo, vol. 50(4), pages 709-716.
    10. David E. Wildasin, 1994. "Income Redistribution and Migration," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 637-656, August.
    11. G. Bellettini & C. Berti Ceroni, 2003. "Opening the borders: immigration policy, migrants' selection and human capital accumulation," Working Papers 473, Dipartimento Scienze Economiche, Universita' di Bologna.
    12. Alexander Kemnitz, 2003. "Immigration, Unemployment and Pensions," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(1), pages 31-48, March.
    13. Michael, Michael S. & Hatzipanayotou, Panos, 2001. "Welfare effects of migration in societies with indirect taxes, income transfers and public good provision," Journal of Development Economics, Elsevier, vol. 64(1), pages 1-24, February.
    14. Wellisch, Dietmar & Wildasin, David E., 1996. "Decentralized income redistribution and immigration," European Economic Review, Elsevier, vol. 40(1), pages 187-217, January.
    15. Bucovetsky, S., 2003. "Efficient migration and redistribution," Journal of Public Economics, Elsevier, vol. 87(11), pages 2459-2474, October.
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    Cited by:

    1. Alexander Kemnitz, 2009. "Native welfare losses from high skilled immigration," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(4), pages 560-570, August.

    More about this item

    Keywords

    migration policies; skilled and unskilled labour; capital mobility; welfare;

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