Could immigration explain wage inequality in a skill-biased technological model?

• Type: Article in International Scientific Journal
• Date: 2016

Authors

Óscar Afonso (Author) FEP; Susana Gabriel (Author) Other; Pedro Rui Mazeda Gil (Author) FEP

Journal

Title: Empirica

Vol. 43 No. 3

Pages: 559-577

ISSN: 0340-8744

Publisher: Springer Nature

Indexing

ISI Web of Knowledge - 4 Citations

Scopus - 3 Citations

Scientific classification

FOS: Social sciences > Economics and Business

CORDIS: Social sciences > Economics

Other information

Authenticus ID: P-00K-MQM

DOI: 10.1007/s10663-015-9305-3

Resumo (PT): The aim of this paper is to evaluate how immigration of high-skilled workers affects the technological-knowledge bias and, in turn, the skill premium in the host countries, in particular bearing in mind the recent experience in a number of European countries. We study a skill-biased dynamic general equilibrium R&D growth model in which the standard R&D technology is modified so wage inequality results from the direction of the technological knowledge, which in turn is induced by the price channel. By solving the transitional dynamics numerically, we show that the rise of the skill premium arises from the price-channel effect, complemented with a mechanism that reflects the impact of immigration on R&D. According to our quantitative results, our model is able to account for a significant proportion of the dynamics of the skill premium in the data for a number of European countries, thus, suggesting that differences in labour skills between immigrants and natives are, in practice, an important source of skill premium variation over time.

Language: English

Type (Professor's evaluation): Scientific