Restricted immigration in a two-sector economy

Dieter Gstach and Thomas Grandner

International Advances in Economic Research, 2000, vol. 6, issue 3, 404-416

Abstract: This paper will analyze income redistribution and fiscal effects caused by immigration in a two-sector economy, where one sector is closed and where foreign and domestic labor are homogeneous. The setup of this model is guided by the stylized fact that today's immigrants in the European Union are distributed highly unequal across sectors, with a clear concentration in low-income sectors. Unlike many previous studies, we do not interpret this segmentation by means of differential skills because we focus on tomorrow's potential immigrants from former communist countries in northeastern Europe, which exhibit education levels similar to those of western European workers. Contrary to results from one-sector models, some pure wage earners may also win from immigration as a result of changing relative prices. Therefore, the political support for immigration depends not only on the capital ownership distribution, but also on relative immigration sector size and relative sector productivity. Furthermore, the necessary tax rate to finance the transfer system may decrease as a result of immigration. Copyright International Atlantic Economic Society 2000

Date: 2000
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1007/BF02294960 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:iaecre:v:6:y:2000:i:3:p:404-416:10.1007/bf02294960

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/11294

DOI: 10.1007/BF02294960

Access Statistics for this article

International Advances in Economic Research is currently edited by Katherine S. Virgo

More articles in International Advances in Economic Research from Springer, International Atlantic Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().