EconPapers    
Economics at your fingertips  
 

Immigration and Outsourcing: A General Equilibrium Analysis

Subhayu Bandyopadhyay () and Howard Wall ()

No 1694, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper analyzes the issues of immigration and outsourcing in a general-equilibrium model of international factor mobility. In our model, legal immigration is controlled through a quota, while outsourcing is determined both by the firms (in response to market conditions) and through policy-imposed barriers. A loosening of the immigration quota reduces outsourcing, enriches capitalists, leads to losses for native workers, and raises national income. If the nation targets an exogenously determined immigration level, the second-best outsourcing tax can be either positive or negative. If in addition to the immigration target there is a wage target (arising out of income distribution concerns), an outsourcing subsidy is required. The analysis is extended to consider illegal immigration and enforcement policy. A higher legal immigration quota will lead to more illegal immigration if skilled and unskilled labor are complements in production. If the two kinds of labor are complements (substitutes), national income increases (decreases) monotonically with the level of legal immigration.

Keywords: outsourcing; immigration (search for similar items in EconPapers)
JEL-codes: F1 F2 O1 J1 J3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2005-07
References: Add references at CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Published in: Review of Development Economics, 2010, 14(3), 433-446

Downloads: (external link)
http://ftp.iza.org/dp1694.pdf (application/pdf)

Related works:
Journal Article: Immigration and Outsourcing: A General‐Equilibrium Analysis (2010) Downloads
Working Paper: Immigration and outsourcing: a general equilibrium analysis (2007) Downloads
Working Paper: Immigration and Outsourcing: A General Equilibrium Analysis (2006) Downloads
Working Paper: Immigration and Outsourcing: A General Equilibrium Analysis (2005) Downloads
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:iza:izadps:dp1694

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().

 
Page updated 2019-10-19
Handle: RePEc:iza:izadps:dp1694