Labor Economics
8th Edition
ISBN: 9781260484434
Author: George Borjas
Publisher: Mcgraw-hill Higher Education (us)
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Chapter 8, Problem 8P
To determine
Determine the wage and employment level of undocumented workers as well as documented workers, when the government follows more active enforcement of employers.
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The last three decades in the United States have been characterized by a very wide gap between the wages of those with more education and those with less. Suppose that workers eventually adjust to this gap by investing more in education, with the result that the wages of less skilled workers rise faster than those of the more-skilled (so that the wage gap between the two falls). How would a decline in the wage gap between the skilled and the unskilled affect immigration to the United States?
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…
The impact of immigration on a country's local-born workers is complex. It is most accurate to assume that immigration has differing impacts on different workers.
a) The skill level of workers appears to be a relevant determinant of the impact that immigration will have on their employment prospects, particularly in terms of wages earned.
Describe how the usage of a point system that results in increased acceptance of relatively high-skill immigrants can help protect those local-born workers who are most vulnerable to increased labour market competition.
b) Describe how education policy can also serve to help protect local-born workers from the negative impacts of increased labour market competition resulting from immigration.
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- In addition to it being illegal to enter the U.S. without a visa or to over-stay one's visa, it is also illegal for U S. employers to hire undocumented or illegal immigrants. Meanwhile, federal U S. enforcement of immigration laws tend to concentrate resources on reducin gillegal immigration rather than on prosecuting U S. firms for employing undocumented workers. Using supply and demand analysis, show what would happen to the wage and employment level of undocumented workers if the government pursued more active enforcement of employers. According to your model, what would happen to the wage ansd employment level of documented workers?arrow_forwardHow might immigration impact the market for labor in the home country? how does it affects the supply of labor, the demand for labor, and equilibrium wages in the home country?arrow_forwardAccording to the chapter 1 of Healey's book, economics and the movement of jobs and opportunity from place to place is the key understanding contemporary immigration. True Falsearrow_forward
- 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.arrow_forwardCan a destination country experience both positive and negative selection in immigration at the same time? Why or Why not?arrow_forwardDescribe the marketing effect of migration.arrow_forward
- The following article has appeared in the latest edition of the American Economic Review (one of the best academic journals in Economics). Very briefly, and with the aid of a diagram, please explain the article’s main finding using the theory on immigration that we learnt in Chapter 4 (Labor Market Equilibrium). “The Abolition of Immigration Restrictions and the Performance of Firms and Workers: Evidence from Switzerland By Andreas Beerli, Jan Ruffner, Michael Siegenthaler, and Giovanni Peri Abstract: We study a reform that granted European cross-border workers free access to the Swiss labor market and had a stronger effect on regions close to the border. The greater availability of cross-borderworkers increased foreign employment substantially. Although many cross- border workers were highly educated, wages of highly educated natives increased. The reason is a simultaneous increase in labor demand: the reform increased the size, productivity, and innovation performance of…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_forwardThe 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.arrow_forward
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