Immigration and native welfare
This article unifies two approaches for identifying the welfare and wage effects of immigration, one emphasizing the immigration surplus, the other stressing a potential welfare loss due to a terms-of-trade effect. We decompose the native welfare effect into a standard complementarity effect, augmented by a Stolper-Samuelson effect, and a terms-of-trade effect. We illustrate the welfare and wage effects of endogenous goods prices in a stylized-specific factors model. Finally, we calibrate this model to a generic OECD economy and provide simulation results. The key insight is that endogenous goods prices play a quantitatively important role, sometimes even overturning received results.
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|Date of creation:||2007|
|Date of revision:|
|Publication status:||Published in International Economic Review 3 48(2007): pp. 731-760|
|Contact details of provider:|| Postal: |
Web page: http://www.vwl.uni-muenchen.de
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