Abstract
We propose a variant of the Ricardo-Viner model featuring three skill levels to analyze skill-based selection in immigration policies. We analyze both wage and welfare effects of alternative types of immigration scenarios. The model incorporates various adjustment mechanisms that may be responsible for why host country wage effects of immigration may in some cases be low, and large in others, as suggested by the empirical literature. A crucial thrust of the paper is to take into account the general equilibrium repercussions from an endogenous price adjustment for both tradable and nontradable goods. We identify conditions under which goods price effects dominate the effects of factor complementarity, potentially leading to welfare losses.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Bibliography
Baldwin, R.E., and P. Martin (1999). Two Waves of Globalization: Superficial Similarities, Fundamental Differences. NBER Working Paper 6921. National Bureau of Economic Research, Cambridge, Mass.
Bauer, T., and K.F. Zimmermann (1997). Looking South and East: Labor Market Implications of Migration in Europe and LDCs. In O. Memedovic, A. Kuyenhoven, and W.T.M. Molle (eds.), Globalization and Labor Markets. Challenges, Adjustment and Policy Responses in the EU and the LDCs. Dordrecht: Kluwer Academic Publishers.
Bilal, S., J.M. Grether, and J. de Melo (2003). Attitudes Towards Immigration: A Trade Theoretic Approach. Review of International Economics 11(2): 253–267.
Borjas, G.J. (1994). The Economics of Immigration. Journal of Economic Literature 32 (December): 1667–1717.
Borjas, G.J. (1995). The Economic Benefits from Immigration. Journal of Economic Perspectives 9(2): 3–22.
Borjas, G.J. (1999). The Economic Analysis of Immigration. In O. Ashenfelter and D. Card (eds.), Handbook of Labor Economics 3. Amsterdam: Elsevier Science.
Borjas, G.J. (2002). Comments. In T. Boeri, G. Hanson, and B. McCormick (eds.), Immigration Policy and the Welfare System. Oxford: Oxford University Press.
Borjas, G.J. (2003). The Labor Demand Curve Is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market. Quarterly Journal of Economics 118(4): 1335–1374.
Brücker, H., G.S. Epstein, B. McCormick, G. Saint-Paul, A. Venturini, and K. Zimmermann (2002). Managing Migration in the European Welfare State. In T. Boeri, G. Hanson, and B. McCormick (eds.), Immigration Policy and the Welfare System. Oxford: Oxford University Press.
Card, D. (2001). Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration. Journal of Labor Economics 19(1): 22–64.
Chiswick, B.R., and T.J. Hatton (2003). International Migration and the Integration of Labor Markets. In M.D. Bordo, A.M. Taylor, and J.G. Williamson (eds.), Globalization in Historical Perspective. Chicago: University of Chicago Press.
Davis, D.R., and D.E. Weinstein (2002). Technological Superiority and the Losses from Migration. NBER Working Paper 8971. National Bureau of Economic Research, Cambridge, Mass.
Deardorff, A.V. (1998). Determinants of Bilateral Trade: Does Gravity Work in a Neo-classical World? In J. A. Frankel (ed.), The Regionalization of the World Economy. Chicago: University of Chicago Press.
De New, J., and K.F. Zimmermann (1994). Native Wage Impacts of Foreign Labor: A Random Effects Panel Analysis. Journal of Population Economics 7(2): 177–192.
Dimaranan, B.V., and R.A. McDougall (2002). Global Trade, Assistance and Production: The GTAP 5 Data Base. West-Lafayette: Center for Global Trade Analysis (Purdue University).
The Economist (1999). Pocket Europe in Figures. 3rd ed. London: The Economist, with Profile Books.
Engerman, S.L., and R.W. Jones (1996). International Labor Flows and National Wages. American Economic Review, Papers and Proceedings 87 (May): 200–204.
Felbermayr, G.J., and W. Köhler (2004). Immigration and Native Welfare. Working Paper 0401. JKU Linz, Department of Economics, Linz.
Friedberg, R.M., and J. Hunt (1995). The Impact of Immigrants on Host Country Wages, Employment and Growth. Journal of Economic Perspectives 9(2): 23–44.
Hanson, G.H., K.F. Scheve, M.J. Slaughter, and A. Spilimbergo (2002). Immigration and the US Economy: Labour-Market Impacts, Illegal Entry, and Policy Choices. In T. Boeri, G. Hanson, and B. McCormick (eds.), Immigration Policy and the Welfare System. Oxford: Oxford University Press.
Jasso, G., M.P. Rosenzweig, and J.P. Smith (2002). The Earnings of US Immigrants: World Skill Prices, Skill Transferability and Selectivity. Working Paper. The Rand Corporation, Santa Monica.
Jones, R.W. (1979). Comment. In R. Dornbusch and J.A. Frenkel (eds.), International Economic Policy: Theory and Evidence. Baltimore and London: Johns Hopkins University Press.
Marquez, J. (2002). Estimating Trade Elasticities. Advanced Studies in Theoretical and Applied Econometrics 39. Boston: Kluwer Academic Publishers.
Martin, P. (2004). Challenge Paper on Population and Migration. Copenhagen: Copenhagen Consensus.
Müller, T. (2003). Migration, Unemployment and Discrimination. European Economic Review 47(3): 409–427.
Mussa, M. (1974). Tariffs and the Distribution of Income: The Importance of Factor Specificity, Substitutability, and Intensity in the Short and Long Run. Journal of Political Economy 82(6): 1191–1203.
Neary, J.P. (1985). International Factor Mobility, Minimum Wage Rates and Factor Price Equalization: A Synthesis. Quarterly Journal of Economics 100 (August): 551–570.
OECD (2001). Employment Outlook. Paris: OECD.
Razin, A., and E. Sadka (1997). International Migration and International Trade. In M.K. Rosenzweig and O. Stark (eds.), Handbook of Population and Family Economics. IB. Amsterdam: Elsevier Science.
O’Rourke, K.H., and J.G. Williamson (1999). Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy. Cambridge, Mass.: MIT Press.
Srinivasan, T.N. (1983). International Factor Movements, Commodity Trade and Commercial Policy in a Specific Factor Model. Journal of International Economics 14 (May): 289–312.
Temin, P. (1999). Globalization. Oxford Review of Economic Policy 15(4): 76–89.
Williamson, J.G. (2004): The Political Economy of World Mass Migration. American Enterprise Institute for Public Policy Research, Washington, D.C.
World Bank (2002). World Development Indicators 2000. CD-ROM. Washington, D.C: World Bank.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2006 Springer-Verlag · Berlin-Heidelberg
About this paper
Cite this paper
Felbermayr, G., Kohler, W. (2006). Immigration and Wages in General Equilibrium: A Theoretical Perspective. In: Langhammer, R.J., Foders, F. (eds) Labor Mobility and the World Economy. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-31045-7_4
Download citation
DOI: https://doi.org/10.1007/978-3-540-31045-7_4
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-31044-0
Online ISBN: 978-3-540-31045-7
eBook Packages: Business and EconomicsEconomics and Finance (R0)