Immigration and Native Welfare

Felbermayr, Gabriel J.; Kohler, Wilhelm

doi:10.2139/ssrn.533982

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Immigration and Native Welfare

JKU Economics Working Paper No. 0401; U of Nottingham, Globaisation & Labour Research Paper No. 2004/04

54 Pages Posted: 22 Apr 2004

See all articles by Gabriel J. Felbermayr

Wilhelm Kohler

University of Tuebingen - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: February 2005

Abstract

We unify two approaches towards identifying native welfare effects of immigration, one emphasizing the immigration surplus (Borjas, 1995, 1999), the other identifying a welfare loss due to terms-of-trade effects (Davis & Weinstein, 2002). We decompose the native welfare effect of immigration into the standard complementarity effect, augmented by a Stolper-Samuelson effect, and a terms-of-trade effect. Using a structural model with three skill-classes we derive propositions on the wage and native welfare effects of various immigration scenarios. A calibration-based simulation reveals that the size of the inflow and immigrant income repatriation are key determinants of the welfare-ranking of different immigration scenarios.

Keywords: International migration, factor movements, international trade, non-tradable goods

JEL Classification: F22, F41, J31

Suggested Citation: Suggested Citation

Felbermayr, Gabriel J. and Kohler, Wilhelm K., Immigration and Native Welfare (February 2005). JKU Economics Working Paper No. 0401; U of Nottingham, Globaisation & Labour Research Paper No. 2004/04, Available at SSRN: https://ssrn.com/abstract=533982 or http://dx.doi.org/10.2139/ssrn.533982