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“Give me your Tired, your Poor,” so I can Prosper: Immigration in Search Equilibrium

  • Andri Chassamboulli
  • Theodore Palivos

We analyze the impact of immigration on the host country within a search and matching model that allows for skill heterogeneity, endogenous skill acquisition, differential search cost between immigrants and natives, capital-skill complementarity and different degree of substitutability between unskilled natives and immigrants. Within such a framework, we find that although immigration raises the overall welfare, it may have distributional effects. Specifically, skilled workers gain in terms of both employment and wages. Unskilled workers, on the other hand, gain in terms of employment but may lose in terms of wages. Nevertheless, in one version of the model, where unskilled workers and immigrants are imperfect substitutes, we find that even the unskilled wage may rise. These results accommodate conflicting empirical findings.

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File URL: http://papers.econ.ucy.ac.cy/RePEc/papers/12-10.pdf
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Paper provided by University of Cyprus Department of Economics in its series University of Cyprus Working Papers in Economics with number 12-2010.

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Length: 44 pages
Date of creation: Dec 2010
Date of revision:
Handle: RePEc:ucy:cypeua:12-2010
Contact details of provider: Web page: http://www.econ.ucy.ac.cy

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