The Immigration Surplus Revisited in a General Equilibrium Model with Endogenous Growth

33 Pages Posted: 30 Jun 2007

See all articles by Stephen Drinkwater

Stephen Drinkwater

University of Surrey - Department of Economics; IZA Institute of Labor Economics

Paul Levine

School of Economics, University of Surrey

Emanuela Lotti

University of Surrey - Department of Economics

Joseph Pearlman

London Metropolitan University - Department of Economics, Finance and International Business (EFIB)

Abstract

We revisit the influential work of Borjas (1995) on the economic gain to the host population from immigration - "the immigration surplus." We develop his analysis by using a general equilibrium endogenous growth model with endogenous capital and several sectors, including an R&D sector driving growth. Skilled immigration leads to a bigger R&D sector share resulting in higher long-term growth. If skilled labor and physical capital are complements, this growth gain increases. Growth effects on the immigration surplus dominate the purely static effects of Borjas, but are not sufficient to eliminate the emergence of losers (skilled natives) within the host population.

Suggested Citation

Drinkwater, Stephen and Levine, Paul L. and Lotti, Emanuela and Pearlman, Joseph G., The Immigration Surplus Revisited in a General Equilibrium Model with Endogenous Growth. Journal of Regional Science, Vol. 47, No. 3, pp. 569-601, August 2007. Available at SSRN: https://ssrn.com/abstract=997445 or http://dx.doi.org/10.1111/j.1467-9787.2007.00521.x

Stephen Drinkwater (Contact Author)

University of Surrey - Department of Economics ( email )

Guildford
Surrey GU2 7XH
United Kingdom

IZA Institute of Labor Economics

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

Paul L. Levine

School of Economics, University of Surrey ( email )

Guildford
Surrey GU2 7XH
United Kingdom
+44 1483 259 380 Ext. 2773 (Phone)
+44 1483 259 548 (Fax)

Emanuela Lotti

University of Surrey - Department of Economics ( email )

Guildford
Surrey GU2 7XH
United Kingdom

Joseph G. Pearlman

London Metropolitan University - Department of Economics, Finance and International Business (EFIB) ( email )

Economics Subject Group, LMBS
London EC2M 6SQ, EC2M 6SQ
United Kingdom

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