Immigration, Occupational Choice and Public Employment

40 Pages Posted: 8 Aug 2014 Last revised: 5 Dec 2014

See all articles by Luca Marchiori

Luca Marchiori

Catholic University of Louvain (UCL); Universite du Luxembourg

Patrice Pieretti

Universite du Luxembourg; Centre de Recherche en Économie Appliquée (CREA)

Benteng Zou

Centre de Recherche en Économie Appliquée (CREA)

Date Written: May 12, 2014

Abstract

This paper investigates the theoretical effects of immigration in an occupational choice model with three sectors: a low-skilled, a high-skilled and a public sector. The originality of our approach is to consider (i) intersectoral mobility of labor and (ii) public employment. We highlight the fact that including a public sector is crucial, since omitting it implies that low-skilled immigration unambiguously reduces wages and welfare of all workers. However, when public employment is considered, we demonstrate that immigration increases wages in the high-skilled and the public sectors, provided that the immigrant workforce is not too large and the access to public jobs is not too easy. The average wage of natives may also increase accordingly. Moreover, immigration may improve workers’ welfare in each sector. Finally, the mechanism underlying these results does not require complementarity between natives and immigrants.

Keywords: Immigration, occupational choice model, public employment

JEL Classification: J24, J61, J45, H44

Suggested Citation

Marchiori, Luca and Pieretti, Patrice and Zou, Benteng, Immigration, Occupational Choice and Public Employment (May 12, 2014). Institute of Mathematical Economics Working Paper No. 516. Available at SSRN: https://ssrn.com/abstract=2477450 or http://dx.doi.org/10.2139/ssrn.2477450

Luca Marchiori

Catholic University of Louvain (UCL) ( email )

Place Montesquieu, 3
Louvain-la-Neuve, 1348
Belgium

Universite du Luxembourg

L-1511 Luxembourg
Luxembourg

Patrice Pieretti

Universite du Luxembourg ( email )

L-1511 Luxembourg
Luxembourg

Centre de Recherche en Économie Appliquée (CREA) ( email )

Campus Limpertsberg
162A, avenue de la Faïencerie
Luxembourg, 1511
Luxembourg

Benteng Zou (Contact Author)

Centre de Recherche en Économie Appliquée (CREA) ( email )

Campus Limpertsberg
162A, avenue de la Faïencerie
Luxembourg, 1511
Luxembourg

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