what is the optimal immigration policy migration jobs and welfare abstract we study the immigration policy that maximizes the welfare of the native population in an economy where the government designs an optimal redistributive welfare system and supplies public goods we show that when the government can design different tax systems for immigrants and natives free immigration is optimal it is also optimal to use the tax system to encourage the immigration of high skill workers and discourage that of low skill workers when immigrants and natives must be treated alike banning low skill immigration and allowing free immigration for high skill workers is optimal however there might be no high skill immigration when heavy taxes are levied on all high skill workers both natives and immigrants

can falling supply explain the rising return to college for younger men a cohort based analysis although the college high school wage gap for younger u s men has doubled over the past 30 years the gap for older men has remained nearly constant in the united kingdom and canada the college high school wage gap also increased for younger relative to older men using a model with imperfect substitution between similarly educated workers in different age groups we argue that these shifts reflect changes in the relative supply of highly educated workers across age groups the driving force behind these changes is the slowdown in the rate of growth of educational attainment that began with cohorts born in the early 1950s in all three countries

migration friendship ties and cultural assimilation we study migrants assimilation by analyzing whether friendship with natives is a measure of cultural assimilation and by investigating the formation of social ties using the german socio economic panel we find that migrants with a german friend are more similar to natives than those without along several important dimensions including concerns about the economy interest in politics and a host of policy issues turning to friendship acquisition we find that becoming employed time spent in the host country the birth of a child residential mobility and additional education acquired in the host country are significant drivers of social network variation

the effect of immigration along the distribution of wages this paper analyses the effect immigration has on wages of native workers unlike most previous work we estimate wage effects along the distribution of wages we derive a flexible empirical strategy that does not rely on pre allocating immigrants to particular skill groups in our empirical analysis we demonstrate that immigrants downgrade considerably upon arrival as for the effects on native wages we find that immigration depresses wages below the 20th percentile of the wage distribution but leads to slight wage increases in the upper part of the wage distribution the overall wage effect of immigration is slightly positive the positive wage effects we find are although modest too large to be explained by an immigration surplus we suggest alternative explanations based on the idea that immigrants are paid less than the value of what they contribute to production generating therefore a surplus and we assess the magnitude of these effects

immigration and house prices in the uk this article studies the effect of immigration on house prices in the uk it finds that immigration has a negative effect on house prices and presents evidence that this negative effect is due to the mobility response of the native population natives respond to immigration by moving to different areas and those who leave are at the top of the wage distribution this generates a negative income effect on housing demand and pushes down house prices the negative effect of immigration on house prices is driven by local areas where immigrants have lower education

time consistent immigration policy under economic and cultural externalities summarydiscussions of immigration policy are typically framed in the context of their economic effects in receiving countries notably labour market and fiscal effects in this paper we characterize immigration policy in a richer model where migrants are also a source of cultural externalities stemming from either preferences or the functioning of formal and informal institutions in receiving countries while in terms of pure economic effects immigrants do not generally have any more incentives than low skilled natives to allow for more immigration in the future this is not the case when accounting for cultural externalities therefore insofar as past immigrants have a voice in affecting future policies a time consistent immigration policy entails back loading as natives attempt at limiting voice of immigrants in the future the economic effects of immigration flows as well as the cultural externality they introduce furthermore natives exploit any pre commitment device to limit immigration flows e g building walls limiting immigrants political rights or accumulating fiscal surpluses

the labor market impact of immigration a quasi experiment exploiting immigrant location rules in germany with the fall of the berlin wall ethnic germans living in eastern europe and the former soviet union were given the opportunity to migrate to germany within 15 years 2 8 million individuals had done so upon arrival these immigrants were exogenously allocated to different regions to ensure an even distribution across the country their inflow can therefore be seen as a quasi experiment of immigration i analyze the effect of these inflows on skill specific employment rates and wages the results indicate a displacement effect of 3 1 unemployed workers for every 10 immigrants that find a job but no effect on relative wages

the effects of immigration in frictional labor markets theory and empirical evidence from eu countries immigrants are new comers in a labor market as a consequence they lack of social networks and other country specific and not directly productive valuable assets affecting their relative bargaining position against employers we introduce this simple observation into a matching model of the labor market and show that immigrants increase employment prospects of competing natives to test the predictions of our model we exploit yearly vari ations between 1998 and 2004 in the share of immigrants within occupations of 12 european countries we identify the causal impact of immigrants on natives employment rate using an instrumental variable strategy based on historical settlement patterns across host countries and occupations by origin countries we find that natives employment rate increases in oc cupations and sectors receiving more immigrants moreover we highlight the heterogeneity of this impact across groups of immigrants and host countries along dimensions that affect immigrants natives relative reservation wages

impact of immigration on inhabitants educational investments we examine whether immigration into the labour market of the building and construction bac industry affects enrolment in vocational programmes that teach the skills required in this industry results suggest that a higher supply of immigrant labour is associated with lower enrolment into programmes teaching bac skills the strength of this relationship increases according to the grades that the students achieved in lower secondary school this finding indicates that the negative effect of immigration on educational recruitment is mainly caused by students who turn away from these programmes rather than a reduction in apprenticeship positions offered by employers

the wage impact of the marielitos a reappraisal this article brings a new perspective to the analysis of the wage effects of the mariel boatlift crisis in which an estimated 125 000 cuban refugees migrated to florida between april and october 1980 the author revisits the question of wage impacts from such a supply shock drawing on the cumulative insights of research on the economic impact of immigration that literature shows that the wage impact must be measured by carefully matching the skills of the immigrants with those of the incumbent workforce given that at least 60 of the marielitos were high school dropouts this article specifically examines the wage impact for this low skill group this analysis overturns the prior finding that the mariel boatlift did not affect miami s wage structure the wage of high school dropouts in miami dropped dramatically by 10 to 30 suggesting an elasticity of wages with respect to the number of workers between 0 5 and 1 5

the effect of emigration from poland on polish wages in this paper we analyse the effect of emigration from poland on polish wages focusing on the 1998 2007 period for poland we use a unique dataset that contains information about household members who are currently living abroad which allows us to develop region specific emigration rates and to estimate the effect of emigration on wages using within region variation our findings show that emigration led to a slight increase in wages for high and medium skilled workers which are the two groups with the largest relative outmigration rates workers at the low end of the skill distribution might have experienced wage decreases

optimal monetary policy in open versus closed economies an integrated approach in clarida et al 1999 hereafter cgg we presented a normative analysis of monetary policy within a simple optimization based closedeconomy framework we derived the optimal policy rule and among other things characterized the gains from commitment also we made precise the implications for the kind of instrument feedback rule that a central bank should follow in practice in this paper we show how our analysis extends to the case of a small open economy openness complicates the problem of monetary management to the extent the central bank must take into account the impact of the exchange rate on real activity and inflation how to factor the exchange rate into the overall design of monetary policy accordingly becomes a central consideration here we show that under certain conditions the monetary policy design problem for the small open economy is isomorphic to the problem of the closed economy that we considered earlier hence all our qualitative results for the closed economy carry over to this case openness does affect the parameters of the model suggesting quantitative implications though the general form of the optimal interest rate feedback rule remains the same as in the closedeconomy case for example how aggressively a central bank should adjust the interest rate in response to inflationary pressures depends on the degree of openness in addition openness gives rise to an important distinction between domestic inflation and consumer price inflation as defined by the cpi to the extent that there is perfect exchange rate pass through we find that the central bank should target domestic inflation and allow the exchange rate to float despite the impact of the resulting exchangerate variability on the cpi kosuki aoki 1999 gali and tommaso monacelli 2000

female labour supply and on the job search an empirical model estimated using complementary data sets we develop an empirical model of labour supply that is consistent with on the job search and which is identified and estimated by combining two data sets the u k family expenditure survey which contains information on income and expenditure and the u k labour force survey which has data on hours and job search behaviour we provide statistical evidence on the compatibility of the two samples for the purposes of estimating our model we find that search has a direct negative effect on hours of work and we establish a strong positive effect of wages on hours

the impact of immigration on the british labour market using data from the british labour force survey this article provides an empirical investigation of the way immigration affects labour market outcomes of native born workers in britain set beside a theoretical discussion of the underlying economic mechanisms we discuss problems arising in empirical estimation and how to address them we show that the overall skill distribution of immigrants is remarkably similar to that of the native born workforce we find no strong evidence that immigration has overall effects on aggregate employment participation unemployment and wages but some differences according to education

immigration wage effects by origin we estimate the direct partial wage effects of immigrant induced increases in labor supply using the national skill cell approach with longitudinal records drawn from norwegian administrative registers the results show overall negative but heterogeneous wage effects with larger effects on immigrant wages than on native wages and with native wages more responsive to inflows from nordic countries than from developing countries these patterns are consistent with natives and nordic citizens being close substitutes while natives and immigrants from developing countries are imperfect substitutes estimates are sensitive to accounting for effective immigrant experience selective native participation and variation in demand conditions and native labor supply

habit formation in consumption and its implications for monetary policy models this paper explores a monetary policy model with habit formation for consumers in which consumers utility depends in part on current consumption relative to past consumption the empirical tests developed in the paper show that one can reject the hypothesis of no habit formation with tremendous condence largely because the habit formation model captures the gradual hump shaped response of real spending to various shocks the paper then embeds the habit consumption specication in a monetary policy model and nds that the responses of both spending and inflation to monetary policy actions are signicantly improved by this modication jel d12 e52 e43

emigration and wages the eu enlargement experiment abstract the enlargement of the european union provides a unique opportunity to study the impact of the lifting of migration restrictions on the migrant sending countries with eu enlargement in 2004 1 2 million workers from eastern europe emigrated to the uk and ireland i use this emigration wave to show that emigration significantly changed the wage distribution in the sending country in particular between young and old workers using a novel dataset from lithuania the uk and ireland for the calibration of a structural model of labor demand i find that over the period of five years emigration increased the wages of young workers by 6 while it had no effect on the wages of old workers contrary to the immigration literature there is no significant effect of emigration on the wage distribution between high skilled and low skilled workers

native migrant labour substitution by industry and wage effects evidence from the uk unlike previous studies we estimate the native migrant substitution elasticity nme differentiated by sector to do so we employ a straightforward estimation strategy that consists of adding slo

immigration conflict and redistribution we study how the possibility of a conflict between natives and immigrants shapes income redistribution in democracies conflict erupts when immigrants are given less than what they could obtain by resorting to confrontation that in turn can make natives vote for lower tax rates and lower public spending we show that income redistribution both vertical from the rich to the poor and horizontal from natives to migrants decreases with the level of immigration this is because the threat of conflict intensifies as the migrant population becomes bigger inequality softens the effect of immigration on tax rates but reduces horizontal redistribution despite the threat of conflict the welfare of the native population unambiguously increases with the stock of migrants

an introduction to the economics of immigration in oecd countries the share of the foreign born in oecd countries is increasing and this article summarizes economics research on the effects of immigration in those nations four broad topics are addressed labor market issues fiscal questions the political economy of immigration and productivity international trade extreme concerns about deleterious labour market and fiscal impacts following from new immigrants are not found to be warranted however it is also clear that government policies and practices regarding the selection and integration of new migrants affect labour market fiscal and social cultural outcomes policies that are well informed well crafted and well executed beneficially improve population welfare

immigrants minorities and labor market competition this paper investigates the extent of labor market competition among immigrants minorities and the native population an analysis of 1980 u s census data reveals that immigrants tend to be substitutes for some labor market groups and complements for others the effects of shifts in immigrant supply on the earnings of native born men are however very small on the other hand increases in the supply of immigrants do have a sizable impact on the earnings of immigrants themselves an increase of 10 percent in the supply of immigrants for example reduces the immigrant wage by about 10 percent

the impact of immigration on the structure of wages theory and evidence from britain immigration to the uk particularly among more educated workers has risen appreciably over the past 30 years and as such has raised labor supply however studies of the impact of immigration have failed to find any significant effect on the wages of native born workers in the uk this is potentially puzzling since there is evidence that changes in the supply of educated natives have had significant effects on their wages using a pooled time series of british cross sectional micro data on male wages and employment from the mid 1970s to the mid 2000s this paper offers one possible resolution to this puzzle namely that in the uk natives and foreign born workers are imperfect substitutes we show that immigration has primarily reduced the wages of immigrants and in particular of university educated immigrants with little discernable effect on the wages of the native born

comment the elusive search for negative wage impacts of immigration labor demand curves slope down 1 from this statement it is a short leap to the malthusian proposition that an increase in the supply of workers reduces wages so short is the leap in fact that the title of george borjas s 2003 paper the labor demand curve is downward sloping reexamining the impact of immigration on the labor market seems to imply that as a theoretical matter immigration has to lower the wages of natives in a well functioning economy however increases in population do not necessarily cause falling wages the effect depends on the supply of capital on the characteristics of the added workers and on the structure of technology in fact the papers by ottaviano and peri op and manacorda manning and wadsworth mmw in this symposium argue that the impacts of immigration on native workers in the united states and the uk have been very small how can these papers arrive at such different conclusions than borjas 2003 who claimed that us immigration between 1980 and 2000 had lowered average native wages by about 3 and the wages of the least educated natives by 9 there are three crucial differences in the assumptions used by the different authors first borjas 2003 holds capital fixed in contrast op and mmw assume that in the longer run capital adjusts to keep the capital labor ratio on its long run path or equivalently that capital is perfectly elastically supplied as was illustrated in an earlier version of op e g ottaviano and peri 2008 table 8 and acknowledged by borjas and katz 2007 table 1 11 this matters a lot if immigration increases aggregate labor supply by 10 as it did in the united states between 1980 and 2000 and capital is fixed average wages would be expected to fall by about 3 if capital can adjust however the effect on average wages is approximately zero importantly op figure 2 show that the trend in the us capital labor ratio was similar in the 1980 2000 period as in earlier decades this and other evidence including the remarkable inflows of capital

on non uniqueness in rational expectations models an attempt at perspective abstract many macroeconomic models involving rational expectations give rise to an infinity of solution paths even when the models are linear in all variables some writers have suggested that this non uniqueness constitutes a serious weakness for the rational expectations hypothesis one purpose of the present paper is to argue that the non uniqueness in question is not properly attributable to the rationality hypothesis but instead is a general feature of dynamic models involving expectations it is also argued that there typically exists in a very wide class of linear rational expectations models a single solution that excludes bubble or bootstrap effects one that occur only because they are arbitrarily expected to occur a systematic procedure for obtaining solutions free from such effects is introduced and discussed in addition this procedure is used to interpret and reconsider several prominent examples with solution multiplicities including ones developed by fischer black and john b taylor

introduction funding gaps theoretical and empirical foundations of government policies to plug alleged business funding gaps are highly controversial but rarely subject to wide ranging in depth debate this symposium from major scholars in the field provides a counterbalance topics addressed cover the theory of lending under asymmetric information its implications for overlending relationship lending as a market solution to information asymmetries government emulation of private sector decision making to eliminate underprovision of high tech equity and theoretically based empirical work testing for funding deficiencies in the high tech sector despite the very different and potentially contradictory contributions the result is surprisingly a set of mutually agreed policy conclusions

migration unemployment and skill downgrading in this paper we analyze the labor market impacts of immigration under flexible and rigid labor market regimes a general equilibrium framework is developed accounting for skill heterogeneity and labor market frictions where unemployed medium skilled manufacturing workers are downgraded into low skilled service jobs while low skilled service workers might end up unemployed the analytical analysis shows that medium skill immigration decreases low skilled unemployment under the flexible regime indicating a complementarity effect while the rigid regime induces a substitution effect leading to low skilled unemployment moreover it leads to wage polarization in a numerical analysis the economic effects of different migration scenarios are quantified

individual attitudes towards migration a re examination of the evidence recent economic research has highlighted the importance of labor market and welfarestate mechanisms in the explanation of individual attitudes towards immigration by contrast political scientists argue that attitudes are mostly determined by individual cultural values and beliefs this paper takes a fresh look at this debate and contains the following contributions to the literature first we address the problem that unobserved cultural values and beliefs might be correlated with education a potential source of bias in the estimations second we compile a detailed database on the education levels of immigrants and natives and on the degree of fiscal redistribution in european countries third our econometric estimates rely on a simple structural model taking individual heterogeneity with respect to education explicitly into account the structural model enables us to evaluate quantitatively the importance of the labor market and welfare state channels and of other individual factors such as cultural values and beliefs our results show that the labor market and welfare state mechanisms play a significant role in explaining individual attitudes however the quantitative importance of these two mechanisms turns out to be rather limited compared to other individual factors jel classification f22 j61

do immigrant inflows lead to native outflows we use 1980 and 1990 census data for 119 larger metropolitan statistical areas to examine the effect of skill group specific immigrant inflows on the location decisions of natives in the same skill group and on the overall distribution of human capital to control for unobserved skill group specific demand factors our models include lagged mobility flows of natives over the 1970 80 period we also estimate instrumental variables models that use the fraction of mexican immigrants in 1970 to predict skill group specific relative immigrant inflows over the 1980s despite wide variation across cities in the size and relative skill composition of immigrant population changes we find no evidence of selective out migration by natives we conclude that immigrant inflows exert a direct effect on the relative skill composition of cities cities that have received relatively unskilled immigrant flows have experienced proportional rises in the size of their unskilled populations this abstract was borrowed from another version of this item

the fiscal effects of immigration to the uk we investigate the fiscal impact of immigration on the uk economy with a focus on the period since 1995 our findings indicate that when considering the resident immigrant population in each year from 1995 to 2011 immigrants from the european economic area eea have made a positive fiscal contribution even during periods when the uk was running budget deficits while non eea immigrants not dissimilar to natives have made a negative contribution for immigrants that arrived since 2000 contributions have been positive throughout and particularly so for immigrants from eea countries notable is the strong positive contribution made by immigrants from countries that joined the eu in 2004

the impact of immigration why do studies reach such different results we classify the empirical literature on the wage impact of immigration into three groups where studies in the first two groups estimate different relative effects and studies in the third group estimate the total effect of immigration on wages we interpret the estimates obtained from the different approaches through the lens of the canonical model to demonstrate that they are not comparable we then relax two key assumptions in this literature allowing for inelastic and heterogeneous labor supply elasticities of natives and the downgrading of immigrants downgrading occurs when the position of immigrants in the labor market is systematically lower than the position of natives with the same observed education and experience levels downgrading means that immigrants receive lower returns to the same measured skills than natives when these skills are acquired in their country of origin we show that heterogeneous labor supply elasticities if ignored may complicate the interpretation of wage estimates and particularly the interpretation of relative wage effects moreover downgrading may lead to biased estimates in those approaches that estimate relative effects of immigration but not in approaches that estimate total effects we conclude that empirical models that estimate total effects not only answer important policy questions but are also more robust to alternative assumptions than models that estimate relative effects

organizational differentiation and earnings dispersion this article analyzes earnings distribution within organizations a formal model specifies mechanisms through which the hierarchical structure of organizations is likely to influence the extent of earnings dispersion the predictions derived from the model are confronted with data on the pay structure and formal organizational structure of 5 600 swedish manufacturing establishments the empirical analyses largely confirm the predictions derived from the model the extent of earnings dispersion within an organization is closely related to the vertical and horizontal differentiation of its formal structure this conclusion holds true even when the sex education and work experiences of those populating the organizational structures are controlled for

labor market effects of demographic shifts and migration in oecd countries the labor force of each industrial country is being shaped by three forces ageing education and migration drawing on a new database for the oecd countries and a standard analytical framework this paper focuses on the relative and aggregate effects of these three forces on wages across different skill and age groups over 2000 to 2010 the variation in the age and educational structure of the labor force emerges as the dominant influence on wage changes the impact is uniform and egalitarian in almost all countries the changes in the age and skill structure favor the low skilled and hurt the highly skilled across age groups immigration plays a relatively minor role except in a handful of open countries like australia and canada where it accentuates the wage equalizing impact of ageing and education emigration is the only inegalitarian influence especially in ireland and a few eastern european countries which have seen significant outflows of high skilled labor to western european union countries

rethinking the area approach immigrants and the labor market in california abstract a framework that uses a constant elasticity of substitution ces production function with skill differentiation and integrated national labor markets has predictions for the employment effect of immigrants at the local level the employment rather than wage response to immigration by skill in a state reveals the production substitutability complementarity between native and immigrant labor this in turn reveals the degree to which immigrants stimulate or depress the demand for native labor to estimate this elasticity i use a novel instrument based on demographic characteristics of total central american migrants or of the mexican population to predict immigration by skill level within california looking at immigration to california between 1960 and 2005 these estimates support the assumption of a nationally integrated labor market by skill and they support the hypothesis that natives and immigrants in the same education experience group are not perfectly substitutable this explains the counter intuitive fact that there is a zero correlation between immigration and wage and employment outcomes of natives in the state

the taylor rule and optimal monetary policy where it denotes the fed s operating target for the federal funds rate pt is the inflation rate measured by the gdp deflator yt is the log of real gdp and y t is the log of potential output identified empirically with a linear trend the rule has since been subject to considerable attention both as an account of actual policy in the united states and elsewhere and as a prescription for desirable policy taylor argues for the rule s normative significance both on the basis of simulations and on the ground that it describes u s policy in a period in which monetary policy is widely judged to have been unusually successful taylor 1999 suggesting that the rule is worth adopting as a principle of behavior here i wish to consider to what extent this prescription resembles the sort of policy that economic theory would recommend i consider the question in the context of a simple but widely used optimizing model of the monetary transmission mechanism which allows one to reach clear conclusions about economic welfare the model is highly stylized but incorporates important features of more realistic models and allows me to make several points that are of more general validity out of concern for the robustness of the conclusions reached the analysis here addresses only broad qualitative features of the taylor rule and attempts to identify features of a desirable policy rule that are likely to hold under a variety of model specifications

optimal interest rate smoothing this paper considers the desirability of the observed tendency of central banks to adjust interest rates only gradually in response to changes in economic conditions it shows in the context of a simple model of optimizing private sector behaviour that assignment of an interest rate smoothing objective to the central bank may be desirable even when reduction of the magnitude of interest rate changes is not a social objective in itself this is because a response of policy to irrelevant lagged variables may be desirable owing to the way it steers private sector expectations of future policy

endogenous job contact networks we use the uk quarterly labour force survey to document the presence of two phenomena first a positive correlation between unemployment rate and the proportion of job seekers who use social networks to nd jobs network use second a non monotone relation between unemployment rate and the proportion of recently employed workers who found their job through friends or relatives network productivity this second relation is positive for low levels of unemployment rate while it becomes negative for high levels of unemployment rate existing models of social networks and labor market generally assume that social networks are exogenous this assumption implies a negative correlation between unemployment rate and network productivity we develop a model where social networks are used to collect job oers but workers decide strategically how much to invest in their network we show that equilibrium job contact networks are dense and more productive in transmitting information when labor market turnover is moderate while they are less productive and segmented into clusters for either high or low turnover the equilibrium response of job contact networks to changes in labor market conditions is sucient to generate

searching for the effect of immigration on the labor market we compare two approaches to analyzing the effects of immigration on the labor market and find that the estimated effect of immigration on u s native labor outcomes depends critically on the empirical experiment used area analyses contrast the level or change in immigration by area with the level or change in the outcomes of non immigrant workers factor proportions analyses treat immigrants as a source of increased national supply of workers of the relevant skill the different effects of immigration on native outcomes in the area and factor proportions methodologies appear to result from the diluting effect of native migration flows across regions and failure to take adequate account of other regional labor market conditions in area comparisons excerpt

self selection and the earnings of immigrants this paper analyzes the way in which the earnings of the immigrant population may be expected to differ from the earnings of the native population because of the endogeneity of the decision to migrate the empirical study shows that differences in the u s earnings of immigrants with the same measured skills but from different home countries are attributable to variations in political and economic conditions in the countries of origin at the time of migration excerpt

openness and income the roles of trade and migration abstract this paper explores the relationship between openness to trade immigration and income per person across countries to address endogeneity concerns we extend the instrumental variables strategy introduced by frankel and romer 1999 we build predictors of openness to immigration and to trade for each country by using information on bilateral geographical and cultural distance while controlling for country size since geography may affect income through other channels we also control for climate disease environment natural resources and colonial origins most importantly we also account for the roles of institutions and early development our instrumental variables estimates provide evidence of a robust positive effect of openness to immigration on long run income per capita in contrast we are unable to establish an effect of trade openness on income we also show that the effect of migration operates through an increase in total factor productivity which appears to reflect increased diversity in productive skills and to some extent a higher rate of innovation

immigration and wages evidence from construction to identify relative wage impacts of immigration we make use of certification and licensing requirements in the norwegian construction sector that give rise to exogenous variation in immigrant employment shares across trades individual panel data reveal substantially lower wage growth for workers in trades with rising immigrant employment than for other workers selective attrition from the sector masks the causal wage impact unless accounted for by individual fixed effects for low and semi skilled workers effects of new immigration are comparable for natives and older immigrant cohorts consistent with perfect substitutability between native and immigrant labor within trade finally we present evidence that immigration reduces price inflation as price increases over the sample period were significantly lower in activities with growth in the immigrant share than in activities with no or small change in immigrant employment

beliefs media exposure and policy preferences on immigration evidence from europe this article studies the joint determination of beliefs about the economic impact of immigration and immigration policy preferences using data from the five rounds of the european social survey 2002 2010 in addition to standard socio economic characteristics this analysis takes individual media consumption into account as a determinant of opinion about immigration our results stress the important role of the endogenous determination of beliefs which appears as a major determinant of policy preferences moreover media exposure appears as a key determinant of beliefs individuals who spend more time to get informed on social and political matters through newspapers and radio have a better opinion on the economic impact of immigration compared with individuals who devote time to other types of content

efficiency gains from liberalizing labor mobility in this paper we quantify the effect of a complete liberalization of cross border migration on the world gdp and its distribution across regions we build a general equilibrium model endogenizing bilateral migration and income disparities between and within countries our calibration strategy uses data on effective and potential migration to identify total migration costs and visa costs by education level data on potential migration reveal that the number of people in the world who have a desire to migrate is around 400 million this number is much smaller than that predicted in previous studies and reflects the existence of high incompressible migration costs in our benchmark framework liberalizing migration increases the world gdp by 11 5 12 5 percent in the medium term our robustness analysis reveals that the gains are always limited in the range of 7 0 percent with schooling externalities to 17 9 percent if network effects are accounted for

immigration wages and education a labour market equilibrium structural model recent literature analysing wage effects of immigration assumes labour supply is fixed across education experience cells this article departs from this assumption estimating a labour market equilibrium dynamic discrete choice model on u s micro data for 1967 2007 individuals adjust to immigration by changing education participation and or occupation adjustments are heterogeneous 4 2 26 2 of prime aged native males change their careers of them some switch to white collar careers and increase education by about three years others reduce labour market attachment and reduce education also by about three years these adjustments mitigate initial effects on wages and inequality natives that are more similar to immigrants are the most affected on impact but also have a larger margin to adjust and differentiate adjustments also produce a self selection bias in the estimation of wage effects at the lower tail of the distribution which the model corrects

the economics of temporary migrations many migrations are temporary a fact that has often been ignored in the economic literature on migration such omission may be serious in that expected migration temporariness can impart a distinct dynamic element to immigrants economic behavior generating possible consequences for nonmigrants in both home and host countries in this paper we provide a thorough examination of the various aspects of temporary migrations that matter for the analysis of economic phenomena we demonstrate the extent of temporary migrations in population movements we show how temporariness can affect the various economic choices and how better data have improved both the measurement of nonpermanent migrations and the analyses of various aspects of migrant behavior we propose a general theoretical framework for modeling temporary migration decisions based on which we outline the various motives for temporariness while simultaneously reviewing related literature and available data sources we discuss the possible consequences of migration temporariness for nonmigrants in both home and host countries jel f22 f24 j11 j61 k37 o15

migration and imperfect labor markets theory and cross country evidence from denmark germany and the uk we investigate the labor market effects of immigration in denmark germany and the uk three countries which are characterized by considerable differences in labor market institutions and welfare states institutions such as collective bargaining minimum wages employment protection and unemployment benefits affect the way in which wages respond to labor supply shocks and hence the labor market effects of immigration we employ a wage setting approach which assumes that wages decline with the unemployment rate albeit imperfectly we find that the wage and employment effects of immigration depend on wage flexibility and the composition of the labor supply shock in germany immigration involves only moderate wage but large unemployment effects since immigrants are concentrated in labor market segments with low wage flexibility the reverse is true for the uk and denmark

the drivers of income inequality in rich countries rising income inequality has recently come centre stage as a core societal concern for rich countries the diagnosis of the forces driving inequality upwards and their relative importance remains hotly contested notably with respect to the roles of globalization versus technology and of market forces versus institutions and policy choices this survey provides a critical review and synthesis of recent research the focus is on income inequality across the entire distribution rather than only on what has been happening at the very top we pay particular attention to including what has been learned from the analysis of micro data to ensuring that the coverage is not unduly us centric and to analyses of the interrelations between the different drivers of inequality the marked differences in inequality trends across countries and time periods reflect how global economic forces such as globalisation and technological change have interacted with differing national contexts and institutions major analytical challenges stand in the way of a consensus emerging on the relative importance of different drivers in how income inequality has evolved in recent decades

what can wages and employment tell us about the uk s productivity puzzle as in many european countries labour productivity in the uk has been stagnant since the start of the great recession this article uses individual data on employment and wages to try to understand whether real wage flexibility can help shed light on the uk s productivity puzzle it finds perhaps unsurprisingly that workforce composition cannot explain the reduction in wages and hence productivity that we observe even compared to previous recessions instead real wages have fallen significantly within jobs this time round why one possibility we investigate is that the labour supply in the uk is higher compared to previous recessions

term structure evidence on interest rate smoothing and monetary policy inertia abstract numerous studies have used quarterly data to estimate monetary policy rules or reaction functions that appear to exhibit a very slow partial adjustment of the policy interest rate the conventional wisdom asserts that this gradual adjustment reflects a policy inertia or interest rate smoothing behavior by central banks however such quarterly monetary policy inertia would imply a large amount of forecastable variation in interest rates at horizons of more than 3 months which is contradicted by evidence from the term structure of interest rates the illusion of monetary policy inertia evident in the estimated policy rules likely reflects the persistent shocks that central banks face

immigrant native wage gaps in time series complementarities or composition effects previous research has shown that immigrants wages decrease when the supply of immigrants increases this negative correlation has been interpreted as evidence of immigrant native complementarities in production the present study finds that it is instead due to changing immigrant composition

targeting inflation by forecast feedback rules in small open economies abstract we argue that in practice the inflation targeting strategy can be approximated by the interest rate responding to the unchanged interest rate forecast of inflation a method is developed to derive unchanged interest rate forecasts in forward looking models and evaluate the performance of the policy rule in an optimizing new keynesian model due to monacelli european central bank working paper series 227 estimated on uk data we find that the policy rule is less prone to generate a determinate rational expectations equilibrium if based on an unchanged interest rate compared to the rule consistent forecast both rules approximate the optimal commitment policy if the central bank attaches sufficient weight to inflation as opposed to output gap stabilization the optimal forecast feedback horizon is close to a year and a half and is largely independent of how much the central bank prefers inflation to output gap stability

impact of low skilled immigration on female labour supply wir untersuchen die auswirkungen von zuwanderung auf das arbeitsangebot einheimischer frauen insbesondere betrachten wir die auswirkung des anstiegs geringqualifizierter zuwanderer die im haushaltssektor arbeiten auf hoch und geringqualifizierte einheimische frauen wir modellieren individuelle entscheidungen uber die haushaltsproduktion und testen die wichtigsten aussagen dieses modells anhand eines harmonisierten datensatzes cnef unsere stichprobe enthalt lander mit unterschiedlich groszugiger familienpolitik unsere ergebnisse zeigen dass mit einem hoheren anteil an migranten im dienstleistungssektor eines lokal begrenzten arbeitsmarktes die einheimischen hochqualifizierten frauen ihr arbeitsangebot erhohen gleichzeitig steigt die partizipationsrate unqualifizierter einheimischer frauen daruber hinaus zeigen wir dass diese effekte in landern mit restriktiverer familienpolitik starker ausfallen

is the new immigration really so bad this article reviews the recent evidence on us immigration focusing on two key questions 1 does immigration reduce the labour market opportunities of less skilled natives 2 have immigrants who arrived after the 1965 immigration reform act been successfully assimilated overall evidence that immigrants have harmed the opportunities of less educated natives is scant on the question of assimilation the success of the us born children of immigrants is a key yardstick by this metric post 1965 immigrants are doing reasonably well even children of the least educated immigrant origin groups have closed most of the education gap with the children of natives

the effect of immigration on public finances the impact of immigration on the public finances is an important influence on public opinion this study aims to provide a thorough conceptual survey pointing out the complexities of a full understanding and the relevance of indirect effects and covering both static perspectives and longer run dynamic issues it considers simple accounting approaches which are relatively neglectful of behavioural responses but also tries to bring out the complexities in the nature of the relationship between immigration and the public exchequer that come with more sophisticated modelling of its economic effects

the effect of immigration on wages exploiting exogenous variation at the national level this paper estimates the effect of immigration on native wages at the national level taking into account the endogenous allocation of immigrants across skill cells time varying exogenous variation across skill cells for a given country is provided by interactions of push factors distance and skill cell dummies distance mitigates the effect of push factors more severely for less educated and middle experienced because the analysis focuses on the united states and canada i propose a two stage approach sub sample 2sls that estimates the first stage regression with an augmented sample of destination countries and the second stage equation with the restricted sub sample of interest i derive asymptotic results for this estimator and suggest several applications beyond the current one the empirical analysis indicates a substantial bias in estimated ols wage elasticities to immigration sub sample 2sls estimates average 1 2 and are very stable to the use of alternative instruments

the impact of immigration on the labor market the literature on the impact of immigration on the labor market is highly controversial the aim of this paper is to review the existing literature and draw some general conclusions on how wages and employment respond to immigration economic studies indicate that the impact of immigration on the average wage and employment of native workers is null or slightly positive however because adjustments take time the immediate labor market effects of unexpected as opposed to expected migration episodes can be detrimental immigration also can have distributional consequences in particular the skill composition of immigrants matters in determining their impact on native labor market outcomes an inflow of immigrants will tend to reduce the wages of competing native workers with skills similar to those of the migrants and increase those of complementary workers with skills that complement those of immigrants by affecting the skill composition of the workforce immigration can create winners and losers among native workers via changes in the wage structure

immigration wages and compositional amenities economists are often puzzled by the stronger public opposition to immigration than trade since the two policies have symmetric effects on wages unlike trade however immigration changes the composition of the local population imposing potential externalities on natives while previous studies have focused on fiscal spillovers a broader class of externalities arise because people value the compositional amenities associated with the characteristics of their neighbors and co workers in this paper we present a new method for quantifying the relative importance of these amenities in shaping attitudes toward immigration we use data for 21 countries in the 2002 european social survey which included a series of questions on the economic and social impacts of immigration as well as on the desirability of increasing or reducing immigrant inflows we find that individual attitudes toward immigration policy reflect a combination of concerns over conventional economic impacts i e on wages and taxes and compositional amenities with substantially more weight on composition effects most of the difference in attitudes to immigration between more and less educated natives is attributable to heightened concerns over compositional amenities among the less educated

the labour market effects of immigration and emigration in oecd countries in this paper we quantify the labor market effects of migration flows in oecd countries during the 1990 s based on a new global database on the bilateral stock of migrants by education level we simulate various outcomes using an aggregate model of labor markets parameterized by a range of estimates from the literature we find that immigration had a positive effect on the wages of less educated natives and it increased or left unchanged the average native wages emigration instead had a negative effect on the wages of less educated native workers and increased inequality within countries

the labour market impact of immigration in the first part of this paper we present a stylized model of the labour market impact of immigra tion we then discuss mechanisms through which an economy can adjust to immigration changes in factor prices output mix and production technology in the second part we explain the problems of empirically estimating how immigration affects labour market outcomes of the resident population and review some strategies to address these we then summarize some recent empirical studies for the uk and other countries we conclude with an outlook on what we believe are important avenues for future research

immigration and inequality immigration is often viewed as a proximate cause of the rising wage gap between highand low skilled workers nevertheless there is controversy over the appropriate theoretical and empirical framework for measuring the presumed effect and over the precise magnitudes involved this paper offers an overview and synthesis of existing knowledge on the relationship between immigration and inequality focusing on evidence from cross city comparisons in the u s while some researchers have claimed that a cross city research design is inherently flawed i argue that the evidence from cross city comparisons is remarkably consistent with recent findings based on aggregate time series data in particular cross city and aggregate time series comparisons provide support for three key conclusions 1 workers with below high school education are perfect substitutes for those with a high school education 2 high school equivalent and college equivalent workers are imperfect substitutes with an elasticity of substitution on the order of 2 3 within education groups immigrants and natives are imperfect substitutes together these results imply that the average impacts of recent immigrant inflows on the relative wages of u s natives are small the effects on overall wage inequality including natives and immigrants are larger reflecting the concentration of immigrants in the tails of the skill distribution and higher residual inequality among immigrants than natives even so immigration accounts for a small share 5 of the increase in u s wage inequality between 1980 and 2000

the performance of forecast based monetary policy rules under model uncertainty we investigate the performance of forecast based monetary policy rules using five macroeconomic models that reflect a wide range of views on aggregate dynamics we identify the key characteristics of rules that are robust to model uncertainty such rules respond to the one year ahead inflation forecast and to the current output gap and incorporate a substantial degree of policy inertia in contrast rules with longer forecast horizons are less robust and are prone to generating indeterminacy in light of these results we identify a robust benchmark rule that performs very well in all five models over a wide range of policy preferences