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Immigration, Search, and Redistribution: A Quantitative Assessment of Native Welfare

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Listed:
  • Michele Battisti
  • Gabriel Felbermayr

    ()

  • Giovanni Peri
  • Panu Poutvaara

    ()

Abstract

We study the effects of immigration on native welfare in a general equilibrium model featuring two skill types, search frictions, wage bargaining, and a redistributive welfare state. Our quantitative analysis suggests that, in all 20 countries studied, immigration attenuates the effects of search frictions. These gains tend to outweigh the welfare costs of redistribution. Immigration has increased native welfare in almost all countries. Both high-skilled and low-skilled natives benefit in two thirds of countries, contrary to what models without search frictions predict. Average total gains from immigration are 1.25% and 1.00% for high and low skilled natives, respectively.

Suggested Citation

  • Michele Battisti & Gabriel Felbermayr & Giovanni Peri & Panu Poutvaara, 2014. "Immigration, Search, and Redistribution: A Quantitative Assessment of Native Welfare," CESifo Working Paper Series 5022, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_5022
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    Cited by:

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    2. Giovanni Facchini & Tommaso Frattini & Cora Signorotto, 2013. "Mind What Your Voters Read: Media Exposure and International Economic Policy Making," Development Working Papers 358, Centro Studi Luca d'Agliano, University of Milano.
    3. Aubry, Amandine & Burzyński, Michał & Docquier, Frédéric, 2016. "The welfare impact of global migration in OECD countries," Journal of International Economics, Elsevier, vol. 101(C), pages 1-21.
    4. repec:ces:ifodic:v:14:y:2017:i:4:p:19267796 is not listed on IDEAS
    5. Gabriel Felbermayr & Clemens Fuest & Jasmin Katrin Gröschl & Daniel Stöhlker, 2017. "Economic Effects of Brexit on the European Economy," EconPol Policy Reports 4, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    6. repec:bla:ecinqu:v:55:y:2017:i:3:p:1231-1264 is not listed on IDEAS
    7. Edo Anthony, 2015. "The Impact of Immigration on Native Wages and Employment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(3), pages 1151-1196, July.
    8. Iftikhar, Zainab & Zaharieva, Anna, 2016. "General equilibrium effects of immigration in Germany: search and matching approach," Center for Mathematical Economics Working Papers 568, Center for Mathematical Economics, Bielefeld University.
    9. Costanza Biavaschi & Michal Burzynski & Benjamin Elsner & Joël Machado, 2016. "The Gain from the Drain - Skill-biased Migration and Global Welfare," CReAM Discussion Paper Series 1624, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    10. Xiangbo Liu & Theodore Palivos & Xiaomeng Zhang, 2017. "Immigration, Skill Heterogeneity, And Qualification Mismatch," Economic Inquiry, Western Economic Association International, vol. 55(3), pages 1231-1264, July.
    11. Ryan Born & Maximilian Schwefer, 2017. "Institutional Dimensions of Successful Labor Market Integration of Refugees," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(4), pages 82-84, 02.
    12. Giovanni Peri, 2016. "Immigrants, Productivity, and Labor Markets," Journal of Economic Perspectives, American Economic Association, vol. 30(4), pages 3-30, Fall.
    13. Chletsos, Michael & Roupakias, Stelios, 2016. "Do Immigrants Compete with Natives in the Greek Labour Market? Evidence from the Skill-Cell Approach Before and During the Great Recession," MPRA Paper 75659, University Library of Munich, Germany.
    14. Gabriel Felbermayr, 2016. "Seizing the Opportunity," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 17(3), pages 16-26, December.
    15. Panu Poutvaara & Daniela Wech, 2017. "Integrating Refugees into the Labor Market – a Comparison of Europe and the United States," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(4), pages 32-43, 02.
    16. Till Nikolka & Panu Poutvaara, 2017. "Brexit – Theory and Empirics," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 17(4), pages 68-75, January.
    17. repec:ces:ifodic:v:14:y:2017:i:4:p:19267786 is not listed on IDEAS
    18. Cords, Dario, 2017. "Endogenous technology, matching, and labor unions: Does low-skilled immigration affect the technological alignment of the host country?," Hohenheim Discussion Papers in Business, Economics and Social Sciences 20-2017, University of Hohenheim, Faculty of Business, Economics and Social Sciences.

    More about this item

    Keywords

    immigration; search; labor market frictions; fiscal redistribution; cross-country comparisons;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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