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Immigration, occupational choice and public employment

Listed author(s):
  • Luca Marchiori

    ()

    (Central Bank of Luxembourg)

  • Patrice Pieretti

    ()

    (CREA, Université du Luxembourg)

  • Benteng Zou

    ()

    (CREA, Université du Luxembourg)

This paper investigates the theoretical effects of immigration in an occupa- tional choice model with three sectors: a low-skilled, a high-skilled and a pu- blic sector. The originality of our approach is to consider (i) intersectoral mobi- lity of labor and (ii) public employment. We highlight the fact that including a public sector is crucial, since omitting it implies that low-skilled immigration un- ambiguously reduces wages and welfare of all workers. However, when public employment is considered, we demonstrate that immigration increases wages in the high-skilled and the public sectors, provided that the immigrant workforce is not too large and the access to public jobs is not too easy. The average wage of natives may also increase accordingly. Moreover, immigration may improve workers' welfare in each sector. Finally, the mechanism underlying these results does not require complementarity between natives and immigrants,

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File URL: http://wwwfr.uni.lu/content/download/73521/922058/file/2014-15_Immigration,%20occupational%20choice%20and%20public%20employment.pdf
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Paper provided by Center for Research in Economic Analysis, University of Luxembourg in its series CREA Discussion Paper Series with number 14-15.

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Date of creation: 2014
Handle: RePEc:luc:wpaper:14-15
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