A Comparative Static Model of the Relationship between Immigration and the Short-Run Job Prospects of Unemployed Residents

25 Pages Posted: 13 Jan 2000

See all articles by Bruce Chapman

Bruce Chapman

Australian National University, Research School of Social Sciences (RSSS) - Economics Program; Australian National University (ANU) - Crawford School of Public Policy

Deborah A. Cobb-Clark

School of Economics, University of Sydney; IZA Institute of Labor Economics

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Abstract

A novel theoretical approach is developed to illustrate the consequences of immigration for the probability that unemployed residents gain a job. Through the use of the vacancies to unemployment ratio it is shown that immigration in theory can either increase or decrease unemployed residents' employment probabilities, but that--contrary to populist rhetoric--an increase is more likely the more recessed is the labour market. With reference to feasible Australian values of the parameters of interest, it is demonstrated that in practically all circumstances immigration increases the overall employment prospects of unemployed residents. Even so, the analysis is very short run, and strong conclusions as to what might be happening over the longer term are not appropriate.

JEL Classification: J61, J63, J64

Suggested Citation

Chapman, Bruce James and Cobb-Clark, Deborah A., A Comparative Static Model of the Relationship between Immigration and the Short-Run Job Prospects of Unemployed Residents. Available at SSRN: https://ssrn.com/abstract=166292 or http://dx.doi.org/10.2139/ssrn.166292

Bruce James Chapman

Australian National University, Research School of Social Sciences (RSSS) - Economics Program ( email )

HC Coombs Building
Australian National University
Canberra, Australian Capital Territory 0200
Australia

Australian National University (ANU) - Crawford School of Public Policy

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

Deborah A. Cobb-Clark (Contact Author)

School of Economics, University of Sydney ( email )

606 Social Sciences Bldg. (A02)
The University of Sydney
Sydney, NSW 2006
Australia
61435061387 (Phone)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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