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

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  • Battisti, Michele

    (University of Glasgow)

  • Felbermayr, Gabriel

    (University of Munich)

  • Peri, Giovanni

    (University of California, Davis)

  • Poutvaara, Panu

    (University of Munich)

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

  • Battisti, Michele & Felbermayr, Gabriel & Peri, Giovanni & Poutvaara, Panu, 2014. "Immigration, Search, and Redistribution: A Quantitative Assessment of Native Welfare," IZA Discussion Papers 8574, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp8574
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    More about this item

    Keywords

    fiscal redistribution; labor market frictions; search; immigration; cross-country comparisons;
    All these keywords.

    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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