Working Paper: CEPR ID: DP1476
Authors: Juan J. Dolado; Juan F. Jimeno; Rosa Duce
Abstract: In this paper we construct a simple model of the effects of immigration on the labour market outcomes of natives. In this model, skilled and unskilled labour are substitutes, immigrants are complementary to the former, and wages are determined by bargaining. We are able to prove that, irrespective of the degree of competition in the market for skilled labour, there are sufficient conditions for immigration to raise total employment. We then estimate the effects of immigration on wages and employment of both types of workers across Spanish provinces following the lifting of some restrictions on migration policy in 1991. We find little evidence that the subsequent inflows of immigrants are associated with negative effects on both wages and employment of less-skilled natives.
Keywords: immigration; heterogeneous labour; wages; unions
JEL Codes: H30; J51; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Immigration (F22) | Total Employment (J20) |
| Immigration Rate (J11) | Reservation Wage (J31) |
| Reservation Wage (J31) | Wages of Skilled Workers (J31) |
| Reservation Wage (J31) | Wages of Unskilled Workers (F66) |
| Immigration Rate (J11) | Wages of Skilled Workers (J31) |
| Immigration Rate (J11) | Wages of Unskilled Workers (F66) |
| Immigration (F22) | Wages of Unskilled Workers (F66) |