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Immigration, Skill Heterogeneity and Qualification Mismatch

Xiangbo Liu, Theodore Palivos and Xiaomeng Zhang

MPRA Paper from University Library of Munich, Germany

Abstract: We investigate the effects of US immigration on native workers in a search and matching environment that allows for skill heterogeneity, differential search cost, cross-skill matching and imperfect transferability of human capital across borders. We find that cross-skill matching benefits the unskilled and hurts the skilled native workers. Similarly, new unskilled immigration benefits the low-skilled native workers and hurts the high-skilled. On the other hand, new skilled immigration benefits both skilled and unskilled natives. Moreover, when we simulate the effects of the actual US immigration influx that took place between the years 2000 and 2009, we find that both skilled and unskilled native workers gain. We also find that initially an improvement in the transferability of human capital benefits the high-skilled natives at the expense of the low-skilled. Nevertheless, below a certain overeducation ratio, further improvements in the transferability of human capital make both types of native workers worse off.

Keywords: Immigration; Search and Matching; Skill Heterogeneity; Occupational Mismatch; Overeducation; Transferability of Human Capital (search for similar items in EconPapers)
JEL-codes: F22 J61 J64 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab and nep-mig
Date: 2014-08-16
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