Immigration, Skill Acquisition and Fiscal Redistribution in a Search-Equilibrium Model

Bright Isaac Ikhenaode

MPRA Paper from University Library of Munich, Germany

Abstract: Focusing on a selected group of 19 OECD countries, we analyze the effects of immigration on natives welfare, labor market outcomes and fiscal redistribution. To this end, we build and simulate a search and matching model that allows for endogenous natives skill acquisition and intergenerational transfers. The obtained results are then compared with different variations of our benchmark model, allowing us to assess to what extent natives skill adjustment and age composition affect the impact of immigration. Our comparative statics analysis suggests that when natives adjust their skill in response to immigration, they successfully avoid, under most scenarios, any potential displacement effect in the labor market. Moreover, taking into account age composition plays a key role in assessing the fiscal impact of immigration, which turns out to be positive when we include retired workers that receive intergenerational transfers. Finally, we find that, under any scenario, our model yields more optimistic welfare effects than a standard search model that abstracts from skill decision and intergenerational redistribution. These welfare effects are found to be overall particularly positive when the migration flows comprise high-skilled workers.

Keywords: Immigration; Welfare; Unemployment; Skill Acquisition; Fiscal Redistribution. (search for similar items in EconPapers)
JEL-codes: F22 J24 J61 J64 (search for similar items in EconPapers)
Date: 2018-11-08
New Economics Papers: this item is included in nep-cmp, nep-dge, nep-int, nep-lab, nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Immigration, skill acquisition, and fiscal redistribution in a search equilibrium model (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:89897

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