A New Look at the Impact of Migration on the Wage Differential

Hsiao-Chuan Chang

No 330974, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: The impact of migrants on the host country’s wages has been an important issue for policy makers and has attracted much research attention. Since no consistent conclusion has been reached regarding this impact, the debate over immigration policy continues in many countries. This paper constructs a theoretical dynamic general equilibrium model by which the transitional and long-run effects of a migration shock on endogenous variables, including the wage differential, can be illuminated. Consistent results from different scenarios are obtained: first, the wage differential is boosted by permanent migrants in both the short and the long run; second, if migrants stay temporarily, the wage differential increases in the short run and the effect dies out in the long run; third, permanent migrants impel domestic workers to upgrade skills by demanding an increased amount of education.

Keywords: Labor and Human Capital; Consumer/Household Economics (search for similar items in EconPapers)
Pages: 16
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:330974

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