Immigration and native welfare

Gabriel Felbermayr and Wilhelm K. Kohler

Munich Reprints in Economics from University of Munich, Department of Economics

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.

Date: 2007
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Citations: View citations in EconPapers (30)

Published in International Economic Review 3 48(2007): pp. 731-760

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Related works:
Journal Article: IMMIGRATION AND NATIVE WELFARE (2007)
Working Paper: Immigration and native welfare (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:20608

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