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Title: The Dynamic Effects of Immigration

Citation Type: Miscellaneous

Publication Year: 2015

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Abstract: I examine the welfare effects of immigration on United States workers. I build a dynamic search and matching model in which immigrants and natives differ according to their outside options, separation rates, wealth holdings and skill composition. Immigration affects native-born welfare by i) altering the skill composition of the labor force, ii) lowering the expected hiring cost of firms, and iii) altering the rate of return on wealth. I demonstrate that the transition period, during which the economy adjusts to immigration, involves both higher returns to wealth and inferior labor market conditions in comparison to the long run steady state. Accounting for transition dynamics therefore shifts the welfare effects of immigration in favor of wealthy households at the expense of workers.

Url: https://hautahi.com/static/docs/ImmigrationDynamics_Kingi.pdf

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Authors: Kingi, Hautahi

Publisher: Cornell University

Data Collections: IPUMS CPS

Topics: Labor Force and Occupational Structure, Migration and Immigration

Countries: United States