A Theory on the Economic Impacts of Immigration

Harashima, Taiji (2017): A Theory on the Economic Impacts of Immigration.

Abstract

The standard view on the economic impact of immigration has been criticized for its inability to solve the “immigration policy puzzle.” It also has a problem in that the “net” income of heterogeneous workers is equalized. These problems arise because the standard view generally depends on a production function in which the elasticity of substitution between heterogeneous workers is constant. This paper constructs an alternative production function in which the elasticity of substitution between heterogeneous workers is not constant and is instead based on a model of total factor productivity. The alternative view presented based on this production function indicates that an “open door” policy is not necessarily economically optimal for host countries under some conditions

• Item Type: MPRA Paper
• Language: English
• Keywords: Immigration; Immigration policy; Production function
• Subjects: D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E23 - Production; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; F - International Economics > F2 - International Factor Movements and International Business > F22 - International Migration; F - International Economics > F6 - Economic Impacts of Globalization > F62 - Macroeconomic Impacts; F - International Economics > F6 - Economic Impacts of Globalization > F66 - Labor; F - International Economics > F6 - Economic Impacts of Globalization > F68 - Policy

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