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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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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-Ifo_Working_Papers/wp-ifo-2005-2010/IfoWorkingPaper-80.pdf
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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
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Handle: RePEc:ces:ifowps:_80
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  1. Stephen Drinkwater & Paul Levine & Emanuela Lotti & Joseph Pearlman, 2007. "The Immigration Surplus Revisited In A General Equilibrium Model With Endogenous Growth," Journal of Regional Science, Wiley Blackwell, vol. 47(3), pages 569-601.
  2. Razin, Assaf & Sadka, Efraim, 1995. "Resisting Migration: Wage Rigidity and Income Distribution," American Economic Review, American Economic Association, vol. 85(2), pages 312-16, May.
  3. George J. Borjas, 1994. "The Economic Benefits from Immigration," NBER Working Papers 4955, National Bureau of Economic Research, Inc.
  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. Gabriel J. Felbermayr & Wilhelm Kohler, 2004. "Immigration and native welfare," Economics working papers 2004-01, Department of Economics, Johannes Kepler University Linz, Austria.
  6. Frederic, DOCQUIER & Hillel, RAPOPORT, 2007. "Silled migration : the perspectives of developing countries," Discussion Papers (ECON - Département des Sciences Economiques) 2007017, Université catholique de Louvain, Département des Sciences Economiques.
  7. Fuest, Clemens & Thum, Marcel, 2001. "Immigration and skill formation in unionised labour markets," European Journal of Political Economy, Elsevier, vol. 17(3), pages 557-573, September.
  8. 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.
  9. 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.
  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. Alexander Kemnitz, 2008. "Native Welfare Losses from High Skilled Immigration," CESifo Working Paper Series 2409, CESifo Group Munich.
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