Migration: a burden or a blessing for natives?

Jean Gabszewicz and Skerdilajda Zanaj

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: We analyse the effects of migration on the production of public goods, income taxes, and on the welfare of residents in the sending and in the receiving country. Migration is based on income differences between countries. Different alternative scenarios are considered. In the first, we assume fully flexible wages in both countries and we show that migration is welfare detrimental only for origin country. In the second scenario, wages are rigid. With upward wage rigidity, migration has detrimental effects for natives of the origin country but it brings benefits to the natives of the destination country. Finally, migration can be welfare detrimental for both countries, under downward wage rigidities.

Keywords: migration; public goods; income taxes; labor market rigidities (search for similar items in EconPapers)
JEL-codes: F2 H2 H4 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-mig and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:14-01

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