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Unemployment and the Immigration Surplus

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  • Udo Kreickemeier
  • Michael S. Michael

Abstract

Within a small open economy fair wage model with unemployment of unskilled workers, we show that exogenous unskilled immigration increases the welfare of natives if the elasticity of the inverse labour demands exceeds a positive finite threshold. This threshold depends positively on the displacement ratio of native workers by immigrants and negatively on the share of immigrants in the unskilled workforce.

Suggested Citation

  • Udo Kreickemeier & Michael S. Michael, 2008. "Unemployment and the Immigration Surplus," Discussion Papers 08/31, University of Nottingham, GEP.
    • Handle: RePEc:not:notgep:08/31
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    File URL: https://www.nottingham.ac.uk/gep/documents/papers/2008/08-31.pdf
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    References listed on IDEAS

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    1. George A. Akerlof & Janet L. Yellen, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(2), pages 255-283.
    2. George J. Borjas, 2021. "The Economic Benefits from Immigration," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 13, pages 411-430, World Scientific Publishing Co. Pte. Ltd..
    3. Gabriel J Felbermayr & Wilhelm Kohler, 2014. "Immigration and Native Welfare," World Scientific Book Chapters, in: European Economic Integration, WTO Membership, Immigration and Offshoring, chapter 10, pages 335-372, World Scientific Publishing Co. Pte. Ltd..
    4. Udo Kreickemeier & Douglas Nelson, 2017. "Fair Wages, Unemployment, and Technological Change in a Global Economy," World Scientific Book Chapters, in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 8, pages 205-235, World Scientific Publishing Co. Pte. Ltd..
    5. Michael, Michael S., 2003. "International migration, income taxes and transfers: a welfare analysis," Journal of Development Economics, Elsevier, vol. 72(1), pages 401-411, October.
    6. Donald R. Davis & David E. Weinstein, 2002. "Technological Superiority and the Losses from Migration," NBER Working Papers 8971, National Bureau of Economic Research, Inc.
    7. Berry, R Albert & Soligo, Ronald, 1969. "Some Welfare Aspects of International Migration," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 778-794, Sept./Oct.
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