A Search‐Equilibrium Approach to the Effects of Immigration on Labor Market Outcomes

19 Pages Posted: 25 Jan 2014

Date Written: February 2014

Abstract

We analyze the impact of the U.S. skill‐biased immigration influx that took place between 2000 and 2009 within a search and matching model that allows for skill heterogeneity, differential search cost, and capital‐skill complementarity. We find that although the skill‐biased immigration raised the overall net income to natives, it had distributional effects. Specifically, unskilled native workers gained in terms of both employment and wages. Skilled native workers, however, gained in terms of employment but lost in terms of wages. Nevertheless, in an extension where skilled natives and immigrants are imperfect substitutes, even the skilled wage rises.

Suggested Citation

Chassamboulli, Andri and Palivos, Theodore, A Search‐Equilibrium Approach to the Effects of Immigration on Labor Market Outcomes (February 2014). International Economic Review, Vol. 55, Issue 1, pp. 111-129, 2014. Available at SSRN: https://ssrn.com/abstract=2384229 or http://dx.doi.org/10.1111/iere.12043

Andri Chassamboulli (Contact Author)

University of Cyprus ( email )

75 Kallipoleos Street
Nicosia CY 1678, Nicosia P.O. Box 2
Cyprus

Theodore Palivos

University of Macedonia ( email )

Thessaloniki, 54006
Greece

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