Immigration, Search and Redistribution: A Quantitative Assessment of Native Welfare

Battisti, Michèle; Felbermayr, Gabriel; Peri, Giovanni; Poutvaara, Panu

doi:10.1093/jeea/jvx035

Cited by 75 publications

(64 citation statements)

References 60 publications

(37 reference statements)

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“…However, recent immigrants are younger than natives and contribute positively to public finances. Contrary to Battisti et al (2017), accounting for the age structure of the immigrant population helps us capturing the fiscal impact of the recent immigration waves. Cross-country estimations of the fiscal impact of the total stock of immigrants are taken from OECD (2013), Tab 3.7.…”

Section: Parameterizationmentioning

confidence: 99%

“…the change in the variety of goods available to consumers, which translates into a change in the average price index. Another related work is that of Battisti et al (2017), who parameterize a general equilibrium model with search frictions and wage bargaining for 20 OECD economies. They also model the fiscal effect of immigration but disregard the market size mechanism.…”

Section: Introductionmentioning

confidence: 99%

“…Note thatBattisti et al (2017) use a different model with exogenous participation rates and endogenous unemployment rates. In the sensitivity analysis in Appendix, we show that our results are robust to alternative unemployment assumptions.…”

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confidence: 99%

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The Changing Structure of Immigration to the OECD: What Welfare Effects on Member Countries?

2018

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HighlightsThe skill and origin-mix of immigration to the OECD has evolved over time; especially, the last wave of immigration in the post-crisis period (2010)(2011)(2012)(2013)(2014)(2015) is different in terms of skill and origin structure from the previous waves.We explore the welfare implication of this changing structure for native OECD citizens in terms of wages, employment, fiscal (i.e., public spending and taxes) and market size effects (i.e., the increased economies of scale and variety in consumption) brought about by immigration.We calibrate a general equilibrium model for 20 selected OECD member states.Results show that the welfare effects of immigration are very heterogeneous across skill groups, countries of destination, and immigration waves; while the last wave of immigration is less skilled and brings about lower benefits overall, the differences across immigration cohorts are small relative to the difference across receiving countries. * We investigate the welfare implications of two pre-crisis immigration waves (1991-2000 and 2001-2010) and of the post-crisis wave (2011)(2012)(2013)(2014)(2015) for OECD native citizens. To do so, we develop a general equilibrium model that accounts for the main channels of transmission of immigration shocks -the employment and wage effects, the fiscal effect, and the market size effect -and for the interactions between them. We parameterize our model for 20 selected OECD member states. We find that the three waves induce positive effects on the real income of natives, however the size of these gains varies considerably across countries and across skill groups. In relative terms, the post-crisis wave induces smaller welfare gains compared to the previous ones. This is due to the changing origin mix of immigrants, which translates into lower levels of human capital and smaller fiscal gains. However, differences across cohorts explain a tiny fraction of the highly persistent, cross-country heterogeneity in the economic benefits from immigration. AbstractWe investigate the welfare implications of two pre-crisis immigration waves (1991-2000 and 2001-2010) and of the post-crisis wave (2011)(2012)(2013)(2014)(2015) for OECD native citizens. To do so, we develop a general equilibrium model that accounts for the main channels of transmission of immigration shocks -the employment and wage effects, the fiscal effect, and the market size effect -and for the interactions between them. We parameterize our model for 20 selected OECD member states. We find that the three waves induce positive effects on the real income of natives, however the size of these gains varies considerably across countries and across skill groups. In relative terms, the post-crisis wave induces smaller welfare gains compared to the previous ones. This is due to the changing origin mix of immigrants, which translates into lower levels of human capital and smaller fiscal gains. However, differences across cohorts explain a tiny fraction of the highly persistent, cross-country heterogeneity in the econo...

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Section: Parameterizationmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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The Changing Structure of Immigration to the OECD: What Welfare Effects on Member Countries?

2018

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“…These effects will be referred to as the labor market effects of migration, henceforth. Recent studies of these labor market effects usually rely on models of aggregate supply and demand for labor, which leave out entrepreneurship and tax responses (see Battisti et al, 2014, Borjas, 2015, Docquier et al, 2014, Ottaviano and Peri, 2012. They show that the wage and employment responses to immigration and emigration are governed by the differences in the socio-demographic characteristics of the native and migrant populations, as well as by the elasticities of substitution between groups of workers as defined by age, education and origin.…”

Section: Introductionmentioning

confidence: 99%

The welfare impact of global migration in OECD countries

Aubry

Burzyński

Docquier

2016

Journal of International Economics

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A B S T R A C TThis paper quantifies the effect of global migration on the welfare of non-migrant OECD citizens. We develop an integrated, multi-country model that accounts for the interactions between the labor market, fiscal, and market size effects of migration, as well as for trade relations between countries. The model is calibrated to match the economic and demographic characteristics of the 34 OECD countries and the rest of the world, as well as trade flows between them in the year 2010. We show that recent migration flows have been beneficial for 69% of the non-migrant OECD population, and for 83% of non-migrant citizens of the 22 richest OECD countries. Winners are mainly residing in traditional immigration countries; their gains are substantial and are essentially due to the entry of immigrants from non-OECD countries. Although labor market and fiscal effects are non-negligible in some countries, the greatest source of gain comes from the market size effect, i.e. the change in the variety of goods available to consumers.

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“…Liu (2010) explores the macroeconomic and welfare effects of illegal immigration on the native born within a dynamic general equilibrium framework with labor market frictions allowing for heterogeneity in skills. Battisti et al (2014) study the effects of immigration on native welfare in a general equilibrium model featuring skill heterogeneity, search frictions, wage bargaining, and a redistributive welfare state. Palivos (2013, 2014) analyze the impact of the immigration influx on labor market outcomes within a search and matching framework in Greece and the United States, respectively.…”

Section: Introductionmentioning

confidence: 99%

Labor Market Performance Effects of Discrimination and Loss of Skill

Larsen

Waisman

2016

Economic Inquiry

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We examine the impact of discrimination on labor market performance when workers are subject to a risk of losing skills during an unemployment experience. Within a search and matching framework, we show that both natives and immigrants are affected by discrimination. Discrimination in one sector has positive spillovers, inducing employment to increase in the other sector and the effect on labor market performance therefore depends on whether discrimination is present in only one sector or in both. Discrimination may induce workers to train more or less than natives after having lost their skills, dependent upon in which sector there is discrimination. Net output tends to be most negatively affected by discrimination among high‐skilled workers. (JEL J15, J31, J61, J64, J71)

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Immigration, Search and Redistribution: A Quantitative Assessment of Native Welfare

Cited by 75 publications

References 60 publications

The Changing Structure of Immigration to the OECD: What Welfare Effects on Member Countries?

The Changing Structure of Immigration to the OECD: What Welfare Effects on Member Countries?

The welfare impact of global migration in OECD countries

Labor Market Performance Effects of Discrimination and Loss of Skill

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