Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18903
Authors: 
Sinn, Hans-Werner
Year of Publication: 
2004
Series/Report no.: 
CESifo Working Paper 1265
Abstract: 
This paper discusses how an industrialized country could defend the wages and social benefits of its unskilled workers against wage competition from immigrants. It shows that fixing social standards harms the workers and that fixing social replacement incomes implies migration into unemployment. Defending wages with replacement incomes brings about first-order efficiency losses that outweigh the budget cost to the government. By contrast, wage subsidies involve much smaller welfare losses. While the exclusion of migrants from a national replacement program does not improve the situation, the (temporary) exclusion of migrants from a national subsidy program makes it possible to avoid a distortion of the migration pattern.
Subjects: 
migration
unemployment
welfare
JEL: 
I38
F22
J61
H5
F15
Document Type: 
Working Paper

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