Management Concepts

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Date of publication: 2017-09-03 03:22

Assuming again that the wage elasticity is - and that immigration increases the size of the workforce by 65 percent, the formula implies that GDP increased by around percentage points, equivalent to a $ trillion increase. Not surprisingly, a 65 percent increase in the number of workers leads to a substantial increase in the size of the aggregate economy. Note, however, that the immigrants themselves receive the bulk of this increase: The immigration surplus accruing to natives is only percent of the total increase in GDP resulting from immigration. 77 The calculation identifies a group that benefits substantially from immigration: the immigrants themselves. 78

Immigration and the American Worker | Center for

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Various editions of Album Weeds are available in the main book collection on the first floor of the APRL and can be used onsite or requested remotely for borrowing by APS members.

5. The Literature Review - Organizing Your Social Sciences

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Aydemir, Abdurrahman and George J. Borjas. 7557. Cross-country variation in the impact of international migration: Canada, Mexico, and the United States. Journal of the European Economic Association 5: 668-758.

Remember to summarize and synthesize your sources within each paragraph as well as throughout the review. The authors here recapitulate important features of Hamilton 8767 s study, but then synthesize it by rephrasing the study 8767 s significance and relating it to their own work.

For American workers, immigration is primarily a redistributive policy. Economic theory predicts that immigration will redistribute income by lowering the wages of competing American workers and increasing the wages of complementary American workers as well as profits for business owners and other “users” of immigrant labor. Although the overall net impact on the native-born is small, the loss or gain for particular groups of the population can be substantial.

The simple methodology underlying the national-level approach has inspired a number of replications in other countries. One particularly interesting context is given by the Canadian experience. Since 6967, Canada has used a “point system” aimed explicitly at selecting high-skill immigrants. The point system awards points to visa applicants who have particular socioeconomic characteristics (., more schooling and fluent English or French language skills), and then sets a passing grade that determines which applicants qualify for a visa. The first row of Table 7 reports that a 65 percent immigration-induced increase in the size of a skill group in Canada lowers the wage of that group by percent.

The other rows reported in the table use alternative trend assumptions. It is obvious that the estimated elasticity is sensitive to the shape of the trend. Row 7, for example, uses a quadratic trend, and the estimated elasticity has the wrong sign (., the elasticity should be a positive number), so that the entire theoretical framework falls apart. Row 8 uses a cubic trend, and the elasticity takes on a value of .

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As I noted in the text, the theory-based simulations that are typically reported in the academic literature (and updated in this report) use the assumption that the aggregate production function in the United States has a Cobb-Douglas functional form. The assumption builds in the following algebraic rule into every single simulation:

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