Migration And Native Labour Essay

The debate revolving the issue of migration has been highly depended on the effects of migration on the economy of host country. In a certain sequence, which initiates from the induction of migrant laborers into the local labor market, leads on to have an impact on wages, employment, economic growth, standard of living and overall well being of the native population. Most of the economic literature identifies the advantages of free trade and free capital movement while, but calls for severe restrictions on migration. In perfect competition, the mobility of both goods and services as well as other factors such as capital and labor lead more efficient outcomes. This section of the paper will provide a combination of theoretical and empirical

First indicator: Income of native population

The literature focuses on the affects of immigration on native wages and employment. Economists have used theory and empirical evidence to conclude different affects of migration on native wage and employment. In theory, the outcome varies depending upon the substitutability of native-immigrant labor and government policy on free movement of labor (Friedberg and Hunt, 1995, p. 28). Also, immigrants tend to move to cities where the growth in demand for labor can accommodate their supply (Card). Thus, the theoretical impact on native wages and employment are not significant if the elasticity to substitute native labor is ____ and movement of labor is towards the market, which needs more labor. Different empirical studies have been conducted using different migration data and host labor markets (different skill level as well as industries). The results found in these studies are rarely inconsistent to each other. The inconsistency is due to the use of different models,

Card’s study was focused on a specific wave of migration and labor market. Looking into the later studies, similar pattern can be seen. Borjas (2003) finds that immigration to the United States between 1980 and 2000 caused a cumulative deterioration in average U.S. salaries by 3.2 per cent (in other words, an annual reduction of barely 0.15 per cent). An even lower rate is estimated by Ottaviano and Peri (2008), who put the accumulated effect of immigration between 1990 and 2006 at 0.4 per cent (in other words, a 0.025 per cent fall in the average