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Does Educational Choice Erode the Immigration Surplus?

  • Wido Geis

Many countries pursue an immigration policy that is targeted at attracting high skilled workers. Borjas (1995) has shown that assuming perfect labor markets immigration leads to a welfare gain for the native population, the so-called immigration surplus. Thus, as the labor market for high skilled workers exhibits few frictions, high skilled immigration should lead to a welfare gain. Nevertheless, this argumentation implicitly assumes that immigration has no influence on the qualification structure of natives. In this paper I show that if natives anticipate high skilled immigration, fewer natives acquire a high education level. In labor markets that are not frictionless this effect can be such strong that high skilled immigration leads to a welfare loss for natives. Moreover, if high skilled migration is expected but not realized, this expectation generates a welfare loss.

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Paper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper Nr. 80.

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Date of creation: 2009
Date of revision:
Handle: RePEc:ces:ifowps:_80
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  1. Frederic Docquier & Hillel Rapoport, 2007. "Skilled migration: the perspective of developing countries," CReAM Discussion Paper Series 0710, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  2. Gabriel J. Felbermayr & Wilhelm Kohler, 2007. "Immigration And Native Welfare," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(3), pages 731-760, 08.
  3. Rodney Ramcharan, 2002. "Migration and Human Capital Formation: Theory and Evidence From the U.S. High School Movement," IMF Working Papers 02/123, International Monetary Fund.
  4. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2004. "A Meta-Analytic Assessment of the Effect of Immigration on Wages," Tinbergen Institute Discussion Papers 04-134/3, Tinbergen Institute.
  5. Stark, Oded & Wang, Yong, 2002. "Inducing human capital formation: migration as a substitute for subsidies," Journal of Public Economics, Elsevier, vol. 86(1), pages 29-46, October.
  6. Alexander Kemnitz, 2009. "Native welfare losses from high skilled immigration," International Tax and Public Finance, Springer, vol. 16(4), pages 560-570, August.
  7. Clemens Fuest & Marcel Thum, 1999. "Immigration and Skill Formation in Unionised Labour Markets," CESifo Working Paper Series 214, CESifo Group Munich.
  8. Razin, Assaf & Sadka, Efraim, 1995. "Resisting Migration: Wage Rigidity and Income Distribution," CEPR Discussion Papers 1091, C.E.P.R. Discussion Papers.
  9. George J. Borjas, 1994. "The Economic Benefits from Immigration," NBER Working Papers 4955, National Bureau of Economic Research, Inc.
  10. Berry, R Albert & Soligo, Ronald, 1969. "Some Welfare Aspects of International Migration," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 778-94, Sept./Oct.
  11. Paul Levine & Emanuela Lotti & Joseph Pearlman, 2003. "The Immigration Surplus Revisited in a General Equilibrium Model with Endogenous Growth," School of Economics Discussion Papers 0203, School of Economics, University of Surrey.
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