NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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

Michele Battisti, Gabriel Felbermayr, Giovanni Peri, Panu Poutvaara

NBER Working Paper No. 20131
Issued in May 2014
NBER Program(s):      LS   PE

We study the effects of immigration on native welfare in a general equilibrium model featuring two skill types, search frictions, wage bargaining, and a redistributive welfare state. Our quantitative analysis suggests that, in all 20 countries studied, immigration attenuates the effects of search frictions. These gains tend to outweigh the welfare costs of redistribution. Immigration has increased native welfare in almost all countries. Both high-skilled and low-skilled natives benefit in two thirds of countries, contrary to what models without search frictions predict. Median total gains from migration are 1.19% and 1.00% for high and low skilled natives, respectively.

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Document Object Identifier (DOI): 10.3386/w20131

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