Unemployment Insurance, Immigrants' Skills, and Native Earnings

Alexander Kemnitz

FinanzArchiv: Public Finance Analysis, 2004, vol. 60, issue 1, 111-139

Abstract: This paper investigates the effect of immigration on native earnings in the presence of unemployment and various social insurance policies. If immigration decreases the economy-wide skill ratio and the welfare state is actuarially fair, total native earnings increase under the constant-replacement-ratio policy, while they decrease under both the constant-benefit and the constant-average-income policy. If, however, immigrants improve the economy-wide skill ratio, natives as a whole gain unambiguously, but most under a constant benefit. The ranking between social policies is robust with respect to general taxation, but can reverse when native educational choices are endogenous.

Keywords: immigration; trade union; unemployment; welfare state; social insurance; skill (search for similar items in EconPapers)
JEL-codes: F22 J5 J61 J65 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (4)

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