Immigration and Native Welfare

Gabriel Felbermayr and Wilhelm Kohler

Chapter 10 in European Economic Integration, WTO Membership, Immigration and Offshoring, 2014, pp 335-372 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This article unifies two approaches for identifying the welfare and wage effects of immigration, one emphasizing the immigration surplus, the other stressing a potential welfare loss due to a terms-of-trade effect. We decompose the native welfare effect into a standard complementarity effect, augmented by a Stolper–Samuelson effect, and a terms-of-trade effect. We illustrate the welfare and wage effects of endogenous goods prices in a stylized-specific factors model. Finally, we calibrate this model to a generic OECD economy and provide simulation results. The key insight is that endogenous goods prices play a quantitatively important role, sometimes even overturning received results.

Keywords: Economic Integration; WTO Membership; Immigration; Offshoring; European Union; International Trade; Migration; Gravity; Germany; Equilibrium; Tariff Liberalization; Commercial Policy; Eastern Enlargement (search for similar items in EconPapers)
Date: 2014
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Related works:
Journal Article: IMMIGRATION AND NATIVE WELFARE (2007)
Working Paper: Immigration and native welfare (2007)
Working Paper: Immigration and native welfare (2004)
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