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Immigration and native welfare

We unify two approaches towards identifying native welfare effects of immigration, one emphasizing the immigration surplus (Borjas, 1995,1999), the other identifying a welfare loss due to terms-of-trade effects (Davis & Weinstein, 2002). We decompose the native welfare effect of immigration into the standard complementarity effect, augmented by a Stolper-Samuelson effect, and a terms-of-trade effect. Using a structural model with three skill-classes we derive propositions on the wage and native welfare effects of various immigration scenarios. A calibration-based simulation reveals that the size of the inflow and immigrant income repatriation are key determinants of the welfare-ranking of different immigration scenarios.

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Paper provided by Department of Economics, Johannes Kepler University Linz, Austria in its series Economics working papers with number 2004-01.

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Date of creation: Feb 2004
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Handle: RePEc:jku:econwp:2004_01
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  19. Samir Jahjah & Ralph Chami & Connel Fullenkamp, 2003. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Working Papers 03/189, International Monetary Fund.
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