Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73599
Authors: 
Mayr, Karin
Year of Publication: 
2008
Series/Report no.: 
Working Paper, Department of Economics, Johannes Kepler University of Linz 0807
Abstract: 
Sectoral labor supply shortage is a cause of concern in many OECD countries and has raised support for immigration as a potential remedy. In this paper, we derive a general equilibrium model with overlapping generations, where natives require a compensating wage differential for working in one sector rather than in another. We identify price and wage effects of immigration on three different groups of natives: the young working in one of two sectors and the old. We determine the outcome of a majority vote on immigration into a given sector as well as the social optimum. The main findings are that i) the old determine the majority voting outcome of positive immigration into both sectors, if natives are not mobile across sectors, ii) the young determine the majority voting outcome of zero immigration into both sectors, if natives are mobile across sectors, iii) the social optimum is smaller than or equal to the majority voting outcome, and iv) sector-specific immigration is not always a substitute for native mobility across sectors.
Subjects: 
immigration
political economy
welfare
sectoral mobility
JEL: 
F22
J31
J61
Document Type: 
Working Paper

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