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Unemployment, Technology and the Welfare Effects of Immigration

  • Kemnitz, Alexander

This paper explores the effects of high and low skilled immigration to a host country with unionized low skilled labor and an unemployment insurance scheme. It is shown that the consequences for the labor market and the welfare of natives depend crucially on the host country's production structure. When high and low skilled labor are close substitutes, low skilled immigration boosts employment and can increase total native income. We provide conditions under which low skilled immigration is Pareto-improving. While high skilled immigration has adverse employment effects, the findings reverse for the case of close complementarity.

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File URL: http://ub-madoc.bib.uni-mannheim.de/1000/1/611.pdf
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Paper provided by Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre in its series Discussion Papers with number 611.

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Date of creation: 2003
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Handle: RePEc:mnh:vpaper:1000
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  1. Clemens Fuest & Marcel Thum, 1999. "Welfare Effects of Immigration in a Dual Labor Market," CESifo Working Paper Series 215, CESifo Group Munich.
  2. 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.
  3. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain The Rising Return To College For Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 705-746, May.
  4. Brecher, Richard A. & Choudhri, Ehsan U., 1987. "International migration versus foreign investment in the presence of unemployment," Journal of International Economics, Elsevier, vol. 23(3-4), pages 329-342, November.
  5. Dominique Gross, 2002. "Three million foreigners, three million unemployed? Immigration flows and the labour market in France," Applied Economics, Taylor & Francis Journals, vol. 34(16), pages 1969-1983.
  6. Wellisch, Dietmar & Walz, Uwe, 1998. "Why do rich countries prefer free trade over free migration? The role of the modern welfare state," European Economic Review, Elsevier, vol. 42(8), pages 1595-1612, September.
  7. Casarico, Alessandra & Devillanova, Carlo, 2003. "Social security and migration with endogenous skill upgrading," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 773-797, March.
  8. Razin, A. & Sadka, E. & Swagel, P., 1998. "Tax Burden and Migration: a Political Economy Theory and Evidence," Papers 15-98, Tel Aviv.
  9. David E. Wildasin, 1994. "Income Redistribution and Migration," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 637-56, August.
  10. Alexander Kemnitz, 2003. "Immigration, Unemployment and Pensions," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(1), pages 31-48, 03.
  11. Ortega, Javier, 2000. "Pareto-Improving Immigration in an Economy with Equilibrium Unemployment," Economic Journal, Royal Economic Society, vol. 110(460), pages 92-112, January.
  12. Benhabib, Jess, 1996. "On the political economy of immigration," European Economic Review, Elsevier, vol. 40(9), pages 1737-1743, December.
  13. Razin, A. & Sadka, E., 1999. "Unskilled Migration: a Burden or a Boon for the Welfare State?," Papers 8-99, Tel Aviv.
  14. George E. Johnson, 1997. "Changes in Earnings Inequality: The Role of Demand Shifts," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 41-54, Spring.
  15. Berry, R Albert & Soligo, Ronald, 1969. "Some Welfare Aspects of International Migration," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 778-94, Sept./Oct.
  16. Jennifer Hunt, 1992. "The impact of the 1962 repatriates from Algeria on the French labor market," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 45(3), pages 556-572, April.
  17. Michael, Michael S. & Hatzipanayotou, Panos, 2001. "Welfare effects of migration in societies with indirect taxes, income transfers and public good provision," Journal of Development Economics, Elsevier, vol. 64(1), pages 1-24, February.
  18. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
  19. Klaus F. Zimmermann, 1995. "Tackling the European Migration Problems," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 45-62, Spring.
  20. Epstein, Gil S. & Hillman, Arye L., 2003. "Unemployed immigrants and voter sentiment in the welfare state," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1641-1655, August.
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