The immigration issue is a sensitive and difficult to put into perspective. The first challenge is political: how to explain to the median voter that immigration is facilitated in its own interest? Against a background of crisis in the labor market and vulnerability employment, such speech is fast becoming difficult to implement. Because the immigration problem is primarily social. If there is agreement on the individual welfare of migrant satisfaction is native to debate. From general point of view, one can quickly examine the remainder provided by an immigration policy. Often mentioned situations of brain drain or cases where an immigrant double dividend transfer intellectual ability or financial gain abroad. Such a global perspective is necessary to carry out coordinated policies between countries. The success of such thinking is essential. Necessary for sustainability policies which must be structural. Required to agree to policies of development assistance.
A recurring question, however, must be addressed: is it an offer of overtime (an immigrant), a facility that would result from immigration penalizes labor supply already place (native)? The answer depends on two conditions: the number of immigrants and the additional production factor endowments of both parties.
The first principle is that the supply of labor is paid its marginal productivity in a competitive market economy. Assuming that the natives have endowments of capital and labor and that immigrants have only endowments work can be studied in two situations. This study is accompanied by a second assumption: the average productivities remain constant and that whatever the amount of additional immigrants. The first case is that of a low influx of immigrants. In this situation, the natives keep their salaries while immigrants are paid on their productivity. However, and this is the second case, if the influx of immigrants becomes important then the differences in factor endowments of production will penalize immigrants who receive a lower wage (abundance of labor input) and will tend to increase the wages of natives who have received capital injections, which are becoming scarce because of the relative abundance of productive factors.
A first partial conclusion is that a sharp increase in immigration increases welfare (measured by the richness) of native but decreases that of immigrants, conditional on different factor endowments. A second conclusion, surprisingly, is that immigration creates an unequal distribution of wealth but not in the sense commonly assumed in public debate.
The challenge in our little story is that immigration increases the income of capital, an additional factor endowments to immigration, and decreases to a lesser extent the labor income factor substitute for immigration. Thus a static perspective, the well-being increases.
can extend the analysis using a dynamic analysis. The increase in return on capital is attracting new foreign capital that encourages investment and thus increase the demand for labor. Thus the relative abundance of labor increases capital income, which in turn stimulates an increase in labor input. We can then show that the influx of immigrants creates an imbalance in the event of partial perfect mobility of productive factors.
We know that the marginal productivity of labor is equal to the capital-labor ratio and returns to scale are constant. For example if we have a ratio of 4 / 8, an influx of immigrants increases the return on capital to 6 and reduces the labor to 6, then passes a ratio of 0.5 to 1. The influx of capital reduces the return on capital at 4, we return to the initial equilibrium with a ratio equal to 0.5. In the case of imperfect mobility of productive factors, this imbalance can not be corrected and become permanent. This is why immigration requires consideration of a multitude of factors, particularly an adaptation of economic policies based on context often differs from one country to another.
These few case studies show that indeed the influx of immigrants could lead to economic imbalances but not necessarily on the natives as many think. These tests are still sketchy and can quickly become more complex. In addition, some mechanisms can compensate the losers of such policies on immigration; what will be discussed in a future post.
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