LABOR ECONOMICS LOOSE PRINT UPGRADE
20th Edition
ISBN: 9781264115211
Author: BORJAS
Publisher: MCG
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Chapter 4, Problem 5P
To determine
The importance of human capital externalities.
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Explain briefly how the effects of immigration may differ across different subpopulations of the U.S. labor market.
The McCarren-Walter Act
adopted a nuanced immigration policy.
converted the quota-based immigration system into a system based on labor needs.
gave continuity to the quota-based immigration system.
declared that no foreign-born Americans could ever be deported.
O decided to maintain the quota-based immigration system only in regard to European countries.
Immigration is a multi-faceted phenomenon, with the potential for both large-scale and industry- specific effects. Consider the following two effects of immigration that could occur in a specific market:
• More consumers are now in the market.
• The price of labor goes down due to increased competition in the labor market.
Focusing only on these two effects, what would we expect to happen to prices and quantities in this market? Note labor is used as an input in all industries.
a. Prices will decrease, but quantities could increase, decrease, or stay the same.
b. Prices will increase, but quantities could increase, decrease, or stay the same.
c. Quantities will decrease, but prices could increase, decrease, or stay the same.
d. Quantities will increase, but prices could increase, decrease, or stay the same.
Chapter 4 Solutions
LABOR ECONOMICS LOOSE PRINT UPGRADE
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- The statements relate to immigration or inequity as it relates to immigration. Identify each statement as either true or false. Statement 1: Countries with even slightly higher standards of living should expect an influx of immigration from their neighboring countries if those countries have a lower standard of living. Statement 2: There is empirical evidence that immigration leads to large increases in unemployment, which causes wages to drop drastically. Statement 3: As a potential solution to an influx of immigration, Case, Fair, and Oster (2012) cite a study by the International Monetary Fund (IMF) stating that free trade can help to reduce inequity, thereby reducing the need for immigration. Statement 4: Immigration is a local, city‑wide concern as opposed to being a national, country‑wide concern because immigrants stay in the city where they first arrive. Statement 5: Technological change will not cause low‑skilled workers to immigrate to another country with a higher…arrow_forwarda)How the following factors influence the present value of net benefits of migration. i) Transportation costs b) If the elasticity of demand for type Z workers is -0.5, then an increase of wage rate from $45 to $55 will cause the quantity demanded to fall by _____ percent. c) What is the difference between geographic labour mobility and occupational labour mobility?arrow_forwardA country with a strict immigration policy is now considering relaxing its policy to permit and encourage immigration in view of its growing aged population. How do the characteristics of immigrants influence the effects of immigration on the receiving country? What are the implications for the receiving country's government policy toward immigration?arrow_forward
- Suppose the immigrant flow from Lowland to Highland is positively selected. In order to mitigate the “brain drain” Lowland experiences as a result of this migration, public officials of Lowland successfully convince all Lowlanders who migrate to Highland to remit 10 percent of their wages to family members.a. What effect will this policy have on the immigrant flow?b. Provide a graph that details the extent to which this policy will limit the brain drain.arrow_forwardBelow is a labor market model for immigration from Mexico(figure on right) to the US (figure on left). Initial supply curves are given by Suso for the US and Smo for Mexico. Supply curves after migration are given by Sus1 and Mus1 respectively. P W b X 0 v = 42 W = 29 x = 19 Suso Sus 1 SM1 SMO P k 2D j > 3 h i a d Dus DM f g 60 0 30 40 Q 20 30 a k = 35 m = 19 n = 7 Refer to the figures above. The net gain to immigrants as a result of migration =arrow_forwardCan a destination country experience both positive and negative selection in immigration at the same time? Why or Why not?arrow_forward
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- The Hart-Celler Immigration and Nationality Act made goal for U.S. immigration policy. A. ethnic diversity OB. economic development OC. family integration D. national security the prevailingarrow_forwardWhich of the following was not an outcome of the Immigration and Nationality Act of 1965? reversed the preference for western and northern European immigrants imposed further restrictions on immigrants from Asia gave preference to immigrants with family ties in the United States gave preference to immigrants with desirable skillsarrow_forwardCould immigration impact demand for labor?How so? How could that change wages?Show graphically.arrow_forward
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