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Resisting Migration: Wage Rigidity and Income Distribution

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  • Razin, Assaf
  • Sadka, Efraim

Abstract

Like any trade activity, migration tends to generate gains to all parties involved - the migrants as well as the native-born population. With a mal-functioning labour market, however, migration will exacerbate the imperfections in the market. Consequently, it may lead to losses to the native-born population which are typically quite sizeable. Another economic problem raised by migration is the additional toll imposed on the welfare-state income-distribution institutions. Being unable to exclude migrants from the various entitlement programmes and public services, the modern welfare state can find migration rather costly. These two economic considerations may help explain the resistance to migration despite the pure gains-from-trade benefits created by it. Immigration could be more beneficial to the native-born population when labour markets are better functioning and the welfare programmes are less comprehensive.

Suggested Citation

  • Razin, Assaf & Sadka, Efraim, 1995. "Resisting Migration: Wage Rigidity and Income Distribution," CEPR Discussion Papers 1091, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:1091
    as

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    References listed on IDEAS

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    1. David E. Wildasin, 1994. "Income Redistribution and Migration," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 637-656, August.
    2. Nerlove, Marc & Razin, Assaf & Sadka, Efraim & von Weizsacker, Robert K., 1993. "Comprehensive income taxation, investments in human and physical capital, and productivity," Journal of Public Economics, Elsevier, vol. 50(3), pages 397-406, March.
    3. J. A. Mirrlees, 1971. "An Exploration in the Theory of Optimum Income Taxation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(2), pages 175-208.
    4. Saint-Paul, Gilles, 1994. "Unemployment, wage rigidity, and the returns to education," European Economic Review, Elsevier, vol. 38(3-4), pages 535-543, April.
    5. George J. Borjas, 1994. "Immigration and Welfare, 1970-1990," NBER Working Papers 4872, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    Demogrants; Income Taxes; International Migration; Investment in Human Capital; Public Services; Skilled and Unskilled Labour;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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