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Title:The effects of high skilled immigration in a dual labour market with union wage setting and fiscal redistribution PDF Logo
Authors:Bonn, Moritz
Issue Date:2011
Series/Report no.:Joint discussion paper series in economics 21-2011
Abstract:We study the effects of high skilled immigration on employment and net income in the receiving economy where the market for low skilled labour is distorted by union wage setting and a redistributive unemployment benefit scheme. Based on the empirical fact that high and low skilled workers are close albeit imperfect substitutes, we show that high skilled immigration can either be beneficial or harmful, both in terms of employment and net income. More precisely, we conclude that a Pareto improvement can be achieved if the unemployment benefit level remains unaffected by high skilled immigration whereas an overall loss in net income cannot be ruled out if we suggest unemployment benefits to be funded by an exogenous egalitarian tax rate.
Subjects:immigration
imperfect labour markets
fiscal redistribution
JEL:F22
H53
J51
J61
Document Type:Working Paper
Appears in Collections:MAGKS Joint Discussion Paper Series in Economics, Universität Marburg

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