Immigration, Search, and Redistribution: A Quantitative Assessment of Native Welfare
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.
We are grateful to comments and suggestions from Simone Bertoli and from seminar participants at seminars in Clermont-Ferrand, Nottingham, and Munich. We thank Robert Breunig and Syed Hasan for providing summary statistics for Australia. Financial support by the Leibniz Association (SAW-2012-ifo-3) is gratefully acknowledged. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Michele Battisti & Gabriel Felbermayr & Giovanni Peri & Panu Poutvaara, 2018. "Immigration, Search and Redistribution: A Quantitative Assessment of Native Welfare," Journal of the European Economic Association, vol 16(4), pages 1137-1188. citation courtesy of