Almost all existing literature assumes immigrants immediately assimilate in the receiving country. In contrast, the present paper considers the case of non-immidiate assimilation, and analyzes immigration conflicts in an overlapping generations dynamic system. We examine three types of conflicts that arise when immigrants come in: skill conflicts that affect the capital rental and also cause the wage gap to change between skilled and unskilled workers; intergenerational conflicts that lead to different impacts on the young and old generations; and distributional conflicts that affect each generation's life time utility unequally. The degree of substitution between natives and immigrants in production plays a key role. We also analyze the welfare composition in detail generation by generation, and provide policy recommendation for each case.
|Date of creation:||Oct 2012|
|Date of revision:||Dec 2012|
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