How Migration Can Change Income Inequality?

Assaf Razin and Efraim Sadka

No 22191, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Motivated by the unique experience of Israel of a supply-side shock of skilled migration, and the concurrent rise in disposable income inequality, this paper develops a model which can explain the mechanism through which a supply-side shock of skilled migration can reshape the political-economy balance and the redistributive policies. First, it depresses the incentives for unskilled migrants to flow in, though they are still free to do so. Second, tax-transfer system becomes less progressive. Nonetheless, the unskilled native-born may well become better-off, even though they lose their political clout.

JEL-codes: F22 H0 J0 (search for similar items in EconPapers)
Date: 2016-04
New Economics Papers: this item is included in nep-int, nep-mig, nep-pbe and nep-pke
Note: IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Working Paper: How Migration Can Change Income Inequality? (2016)
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