Working Paper: NBER ID: w20131
Authors: Michele Battisti; Gabriel Felbermayr; Giovanni Peri; Panu Poutvaara
Abstract: We study the effects of immigration on native welfare in a general equilibrium model featuring two skill types, search frictions, wage bargaining, and a redistributive welfare state. Our quantitative analysis suggests that, in all 20 countries studied, immigration attenuates the effects of search frictions. These gains tend to outweigh the welfare costs of redistribution. Immigration has increased native welfare in almost all countries. Both high-skilled and low-skilled natives benefit in two thirds of countries, contrary to what models without search frictions predict. Median total gains from migration are 1.19% and 1.00% for high and low skilled natives, respectively.
Keywords: Immigration; Welfare; Labor Market; Redistribution
JEL Codes: F22; J31; J61; J68
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| immigration (F22) | native welfare (I39) |
| immigration (F22) | unemployment for natives (J68) |
| immigration (F22) | search frictions (F12) |
| search frictions (F12) | native welfare (I39) |
| job creation effect of immigrants (J68) | unemployment rates for natives (J15) |
| redistributive effects of immigration (H23) | native welfare (I39) |