The Economics of Immigration, by Bansak, Simpson & Zavodny ©2015

Figure 7.1: Welfare effects of immigration in the destination and the origin

Wage in Wage in destination origin DD A DO WD

B D F W* W* E G C I G WO C J H H L1 L* Labor in L Labor in destination origin

The Economics of Immigration, by Bansak, Simpson & Zavodny ©2015

Table 7.1: Winners and losers from immigration

GroupWithout

immigrationWith

immigrationGain (or

loss)Immigrants J J + E + I E + I

Destination country:Competing workers B + C C –BOther factors of production A A + B + D B + D

Origin country:Competing workers H H + G GOther factors of production F + G + I F –(G + I)

Net gain due to immigration D+E

The Economics of Immigration, by Bansak, Simpson & Zavodny ©2015

Figure 7.2: Adding migration costs to the basic immigration model

Wage in Wage in destination origin DD WD DO

WD** W* C W* WO** WO L1 L** L* Labor in L Labor in destination origin

The Economics of Immigration, by Bansak, Simpson & Zavodny ©2015

Figure 7.3: Effects of immigration in the destination with upward-sloping labor supply

Wage S S’ WD WD’ D LN LD LD’ Labor

The Economics of Immigration, by Bansak, Simpson & Zavodny ©2015

Figure 7.4: Welfare effects of immigration in the destination

The Economics of Immigration, by Bansak, Simpson & Zavodny ©2015

Figure 7.5: Effects of immigration that increases labor demand and labor supply

Wage S S’ WD WD’ D’ D LN LD LD’ Labor

The Economics of Immigration, by Bansak, Simpson & Zavodny ©2015

Figure 7.6: Effects of immigration when immigrants and natives are complements

Wage S WD’ WD D’ D LD LD’ Labor

The Economics of Immigration, by Bansak, Simpson & Zavodny ©2015

Figure 7.7: Effects of immigration with skilled and unskilled workers

Relative wage S S’ WS/WU WS/WU

’ D S/U S/U’ S/U: ratio of skilled to unskilled workers (a) Skilled immigration

Relative wage S’ S WS/WU

’ WS/WU D S/U’ S/U S/U: ratio of skilled to unskilled workers (b) Unskilled immigration

The Economics of Immigration, by Bansak, Simpson & Zavodny ©2015

Figure 7.8: Effect of immigration on relative supply and demand for communication versus manual skills

Relative wage (WC/WM) S’ S WC/WM’ WC/WM D C/M’ C/M Ratio of communications to manual labor

The Economics of Immigration, by Bansak, Simpson & Zavodny ©2015

Figure 7.9: Labor demand is more elastic as physical capital adjusts in the long run

Wage S S’ WLR DLR WSR DSR LSR LLR Labor

The Economics of Immigration, by Bansak, Simpson & Zavodny ©2015

Figure 7.10: Three components of international mobility

Goods and services (International trade) Labor mobility Capital mobility (migration) (Foreign investment)