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Migration: a burden or a blessing for natives?

Author

Listed:
  • Jean J. Gabszewicz

    () (CORE, Université Catholique de Louvain, Belgique)

  • Skerdilajda Zanaj

    () (CREA, Université du Luxembourg)

Abstract

We analyse the effects of migration on the production of public goods, income taxes, and on the welfare of residents in the sending and in the receiving country. Migration is based on income differences between countries. Different alternative scenarios are considered. In the first, we assume fully flexible wages in both countries and we show that migration is welfare detrimental only for origin country. In the second scenario, wages are rigid. With upward wage rigidity, migration has detrimental effects for natives of the origin country but it brings benefits to the natives of the destination country. Finally, migration can be welfare detrimental for both countries, under downward wage rigidities.

Suggested Citation

  • Jean J. Gabszewicz & Skerdilajda Zanaj, 2014. "Migration: a burden or a blessing for natives?," CREA Discussion Paper Series 14-01, Center for Research in Economic Analysis, University of Luxembourg.
  • Handle: RePEc:luc:wpaper:14-01
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    File URL: http://wwwfr.uni.lu/content/download/73965/926330/file/2014-01_Migration%20-%20a%20burden%20or%20a%20blessing%20for%20the%20natives.pdf
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    References listed on IDEAS

    as
    1. Timothy Miller & Ronald Lee, 2000. "Immigration, Social Security, and Broader Fiscal Impacts," American Economic Review, American Economic Association, vol. 90(2), pages 350-354, May.
    2. Razin, Assaf & Sadka, Efraim, 2000. " Unskilled Migration: A Burden or a Boon for the Welfare State?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(3), pages 463-479, June.
    3. David Card, 2009. "Immigration and Inequality," CReAM Discussion Paper Series 0907, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    4. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association;National Tax Journal, vol. 52(2), pages 269-304, June.
    5. David E. Wildasin, 1994. "Income Redistribution and Migration," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 637-656, August.
    6. Fuest, Clemens & Thum, Marcel, 2000. "Welfare effects of immigration in a dual labor market," Regional Science and Urban Economics, Elsevier, vol. 30(5), pages 551-563, September.
    7. Michael, Michael S., 2003. "International migration, income taxes and transfers: a welfare analysis," Journal of Development Economics, Elsevier, vol. 72(1), pages 401-411, October.
    8. Wilson, John Douglas & Wildasin, David E., 2004. "Capital tax competition: bane or boon," Journal of Public Economics, Elsevier, vol. 88(6), pages 1065-1091, June.
    9. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 269-304, June.
    10. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1335-1374.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    migration; public goods; income taxes; labor market rigidities;

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H4 - Public Economics - - Publicly Provided Goods

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