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Immigration & Low-Skilled Labor

Essentially, Chiswick contends that the immigration of low-skilled labor into a country need not harm the low-income labor already resident in the receiving country if a benign income transfer system subsidizes any income losses suffered by the resident low-skilled labor while simultaneously maintaining the level of income for resident high-skilled labor. An implicit condition in this scenario is that the immigrating low-skilled labor will paid wages lower than those being earned by the resident low-skilled labor prior to the immigration, and that income transfers will not be made to the immigrating low-skilled labor to raise their income to the level of the resident low-skilled labor.

Chiswick's logic may be explained through reference to the chart on the following page. Country A is a high-wage country to which immigration will occur from low-wage Country B. Prior to any immigration, the wage rate in A is at point 1, labor use is at point 5, and VMP is at point 2. Subsequent to immigration, labor use in A increases to point 6, while average wage rates fall and VMP increases to point 3. Both the total economic gain for Country A and the total economic loss for Country B are defined by the space inside points 2, 3, 5, and 6. The gain for Country A, however, is predicated on keeping the income level for the immigrating labor sufficiently below that of the resident low-skilled labor to permit income transfer from the gain in economic output without harming resident high-skilled labor.

Opportunities for interest rate swaps exist in those instances where comparative advantages in different capital markets exists between companies. With respect to the three companiesùHarpo, Groucho, and Chico, three assessments are required to determine what interest rate swap opportunities exist. These three comparative advantage assessments are as follows:

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Immigration & Low-Skilled Labor. (1969, December 31). In LotsofEssays.com. Retrieved 04:26, March 29, 2024, from https://www.lotsofessays.com/viewpaper/1693623.html