IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/43297.html
   My bibliography  Save this paper

A Search-Equilibrium Approach to the Effects of Immigration on Labor Market Outcomes

Author

Listed:
  • Chassamboulli, Andri
  • Palivos, Theodore

Abstract

We analyze the impact of the skill-biased immigration influx that took place during the years 2000-2009 in the United States, within a search and matching model that allows for skill heterogeneity, differential search cost between immigrants and natives, capital-skill complementarity and possibly endogenous skill acquisition. Within such a framework, we find that although the skill-biased immigration raised the overall net income to natives, it may have had distributional effects. Specifically, unskilled native workers gained in terms of both employment and wages. Skilled native workers, on the other hand, gained in terms of employment but may have lost in terms of wages. Nevertheless, in one extension of the model, where skilled workers and immigrants are imperfect substitutes, we find that even the skilled wage may have risen.

Suggested Citation

  • Chassamboulli, Andri & Palivos, Theodore, 2012. "A Search-Equilibrium Approach to the Effects of Immigration on Labor Market Outcomes," MPRA Paper 43297, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:43297
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/43297/1/MPRA_paper_43297.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gianmarco I. P. Ottaviano & Giovanni Peri, 2021. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 9, pages 245-290, World Scientific Publishing Co. Pte. Ltd..
    2. Linnea Polgreen & Pedro Silos, 2008. "Capital-Skill Complementarity and Inequality: A Sensitivity Analysis," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(2), pages 302-313, April.
    3. Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
    4. David Card, 2009. "Immigration and Inequality," American Economic Review, American Economic Association, vol. 99(2), pages 1-21, May.
    5. Laing, Derek & Palivos, Theodore & Wang, Ping, 2003. "The economics of 'new blood'," Journal of Economic Theory, Elsevier, vol. 112(1), pages 106-156, September.
    6. Hazari, Bharat R. & Sgro, Pasquale M., 2003. "The simple analytics of optimal growth with illegal migrants," Journal of Economic Dynamics and Control, Elsevier, vol. 28(1), pages 141-151, October.
    7. George J. Borjas & Rachel M. Friedberg, 2009. "Recent Trends in the Earnings of New Immigrants to the United States," NBER Working Papers 15406, National Bureau of Economic Research, Inc.
    8. Bjoern Bruegemann & Giuseppe Moscarini, 2010. "Rent Rigidity, Asymmetric Information, and Volatility Bounds in Labor," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(3), pages 575-596, July.
    9. Moy, Hon Man & Yip, Chong K., 2006. "The simple analytics of optimal growth with illegal migrants: A clarification," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2469-2475, December.
    10. Frederic DOCQUIER & Çaglar OZDEN & Giovanni PERI, 2010. "The Wage Effects of Immigration and Emigration," LIDAM Discussion Papers IRES 2010044, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    11. Borjas, George J. (ed.), 2007. "Mexican Immigration to the United States," National Bureau of Economic Research Books, University of Chicago Press, edition 2, number 9780226066325, September.
    12. Andri Chassamboulli & Theodore Palivos, 2014. "A Search‐Equilibrium Approach To The Effects Of Immigration On Labor Market Outcomes," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(1), pages 111-129, February.
    13. George J. Borjas & Jeffrey Grogger & Gordon H. Hanson, 2008. "Imperfect Substitution between Immigrants and Natives: A Reappraisal," NBER Working Papers 13887, National Bureau of Economic Research, Inc.
    14. Christopher A. Pissarides, 2009. "The Unemployment Volatility Puzzle: Is Wage Stickiness the Answer?," Econometrica, Econometric Society, vol. 77(5), pages 1339-1369, September.
    15. Derek Laing & Theodore Palivos & Ping Wang, 1995. "Learning, Matching and Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 62(1), pages 115-129.
    16. Robert E. Hall & Paul R. Milgrom, 2008. "The Limited Influence of Unemployment on the Wage Bargain," American Economic Review, American Economic Association, vol. 98(4), pages 1653-1674, September.
    17. Olivier Jean Blanchard & Peter A. Diamond, 1989. "The Aggregate Matching Function," NBER Working Papers 3175, National Bureau of Economic Research, Inc.
    18. George J. Borjas, 2021. "The Labor Demand Curve Is Downward Sloping: Reexamining The Impact Of Immigration On The Labor Market," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 9, pages 235-274, World Scientific Publishing Co. Pte. Ltd..
    19. Theodore Palivos, 2009. "Welfare effects of illegal immigration," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(1), pages 131-144, January.
    20. Ben-Gad, Michael, 2004. "The economic effects of immigration--a dynamic analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 28(9), pages 1825-1845, July.
    21. George J. Borjas & Lawrence F. Katz, 2007. "The Evolution of the Mexican-Born Workforce in the United States," NBER Chapters, in: Mexican Immigration to the United States, pages 13-56, National Bureau of Economic Research, Inc.
    22. Arthur J. Hosios, 1990. "On The Efficiency of Matching and Related Models of Search and Unemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(2), pages 279-298.
    23. Mortensen, Dale & Pissarides, Christopher, 2011. "Job Creation and Job Destruction in the Theory of Unemployment," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 1-19.
    24. Michael Ben-Gad, 2008. "Capital-Skill Complementarity and the Immigration Surplus," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(2), pages 335-365, April.
    25. George J. Borjas, 2007. "Mexican Immigration to the United States," NBER Books, National Bureau of Economic Research, Inc, number borj06-1.
    26. Griliches, Zvi, 1969. "Capital-Skill Complementarity," The Review of Economics and Statistics, MIT Press, vol. 51(4), pages 465-468, November.
    27. Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, vol. 95(1), pages 25-49, March.
    28. George J. Borjas, 2007. "Introduction to "Mexican Immigration to the United States"," NBER Chapters, in: Mexican Immigration to the United States, pages 1-12, National Bureau of Economic Research, Inc.
    29. Liu, Xiangbo, 2010. "On the macroeconomic and welfare effects of illegal immigration," Journal of Economic Dynamics and Control, Elsevier, vol. 34(12), pages 2547-2567, December.
    30. Peter A. Diamond, 1982. "Wage Determination and Efficiency in Search Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(2), pages 217-227.
    31. Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, vol. 68(5), pages 1029-1054, September.
    32. Ortega, Javier, 2000. "Pareto-Improving Immigration in an Economy with Equilibrium Unemployment," Economic Journal, Royal Economic Society, vol. 110(460), pages 92-112, January.
    33. Acemoglu, Daron, 2001. "Good Jobs versus Bad Jobs," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 1-21, January.
    34. Liu, Xiangbo, 2009. "On the Macroeconomic and Welfare Effects of Illegal Immigration," MPRA Paper 15469, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andri Chassamboulli & Theodore Palivos, 2010. "“Give me your Tired, your Poor,” so I can Prosper: Immigration in Search Equilibrium," University of Cyprus Working Papers in Economics 12-2010, University of Cyprus Department of Economics.
    2. Chassamboulli, Andri & Palivos, Theodore, 2013. "The impact of immigration on the employment and wages of native workers," Journal of Macroeconomics, Elsevier, vol. 38(PA), pages 19-34.
    3. Xiangbo Liu & Theodore Palivos & Xiaomeng Zhang, 2017. "Immigration, Skill Heterogeneity, And Qualification Mismatch," Economic Inquiry, Western Economic Association International, vol. 55(3), pages 1231-1264, July.
    4. Andri Chassambouli & Giovanni Peri, 2015. "The Labor Market Effects of Reducing the Number of Illegal Immigrants," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(4), pages 792-821, October.
    5. Sandra Orozco-Aleman & Heriberto Gonzalez-Lozano, 2018. "Labor Market Effects of Immigration Policies Border Enforcement and Amnesty," Journal of Labor Research, Springer, vol. 39(2), pages 150-177, June.
    6. Andri Chassambouli & Giovanni Peri, 2015. "The Labor Market Effects of Reducing the Number of Illegal Immigrants," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(4), pages 792-821, October.
    7. Cords, Dario, 2017. "Endogenous technology, matching, and labor unions: Does low-skilled immigration affect the technological alignment of the host country?," Hohenheim Discussion Papers in Business, Economics and Social Sciences 20-2017, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    8. Lewis, Ethan & Peri, Giovanni, 2015. "Immigration and the Economy of Cities and Regions," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 625-685, Elsevier.
    9. Frederic DOCQUIER & Çaglar OZDEN & Giovanni PERI, 2010. "The Wage Effects of Immigration and Emigration," LIDAM Discussion Papers IRES 2010044, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    10. Evren Ceritoglu & H. Burcu Gurcihan Yunculer & Huzeyfe Torun & Semih Tumen, 2017. "The impact of Syrian refugees on natives’ labor market outcomes in Turkey: evidence from a quasi-experimental design," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-28, December.
    11. Fiaschi, Davide & Tealdi, Cristina, 2020. "Winners and Losers of Immigration," IZA Discussion Papers 13600, Institute of Labor Economics (IZA).
    12. Tsasa, Jean-Paul K., 2022. "Labor market volatility in a fully specified RBC search model: An analytical investigation," Journal of Mathematical Economics, Elsevier, vol. 103(C).
    13. Elena Gentili & Fabrizio Mazzonna, 2024. "What drives the substitutability between native and foreign workers? Evidence about the role of language," Economica, London School of Economics and Political Science, vol. 91(361), pages 210-237, January.
    14. Hausmann, Ricardo & Nedelkoska, Ljubica, 2018. "Welcome home in a crisis: Effects of return migration on the non-migrants' wages and employment," European Economic Review, Elsevier, vol. 101(C), pages 101-132.
    15. Ortega, Javier & Verdugo, Gregory, 2014. "The impact of immigration on the French labor market: Why so different?," Labour Economics, Elsevier, vol. 29(C), pages 14-27.
    16. Ikhenaode, Bright Isaac, 2024. "Immigration, skill acquisition, and fiscal redistribution in a search equilibrium model," Macroeconomic Dynamics, Cambridge University Press, vol. 28(1), pages 1-31, January.
    17. Shiyun Zhang, 2022. "Immigration and Crime in Frictional Labor Markets," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 44, pages 152-183, April.
    18. Ottaviano, Gianmarco & Peri, Giovanni, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," CEPR Discussion Papers 6916, C.E.P.R. Discussion Papers.
    19. Andri Chassamboulli & Xiangbo Liu, 2024. "Immigration, Legal Status and Fiscal Impact," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 54, October.
    20. Ariu, Andrea & Müller, Tobias & Nguyen, Tuan, 2023. "Immigration and the Slope of the Labor Demand Curve: The Role of Firm Heterogeneity in a Model of Regional Labor Markets," CEPR Discussion Papers 18091, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    Immigration; Search; Unemployment; Skill-heterogeneity;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:43297. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.