TY  - JOUR
AU  - Brezis,Elise S.
AU  - Krugman,Paul
TI  - Immigration, Investment and Real Wages
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4563
PY  - 1993
Y2  - December 1993
UR  - http://www.nber.org/papers/w4563
L1  - http://www.nber.org/papers/w4563.pdf
N1  - Author contact info:
Paul R. Krugman
Department of Economics
Princeton University
Woodrow Wilson School
Princeton, NJ  08544
Tel: 609/258-4570
Fax: 609/258-2809
E-Mail: pkrugman@princeton.edu
AB  - When a country is the recipient of large-scale, politically motivated immigration -- as has been the case for Israel in recent years -- the initial impact is to reduce real wages.  Over the longer term, however, the endogenous response of investment, together with increasing returns, may well actually increase real earnings.  If immigration itself is not wholly exogenous, but responds to real wages, there may be multiple equilibria.  That is, optimism or pessimism about the success of the economy at absorbing immigrants may constitute a self-fulfilling prophecy.
ER  -