The impact of immigrant dynasties on wage inequality

Michael Ben-Gad

doi:10.1016/S0147-9121(05)24003-7

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Research in Labor Economics

ISSN: 0147-9121
Series editor(s): Professor Solomon Polachek, Dr Konstantinos Tatsiramos

Subject Area: Economics

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The impact of immigrant dynasties on wage inequality

Document Information:
Title:	The impact of immigrant dynasties on wage inequality
Author(s):	Michael Ben-Gad
Volume:	24 Editor(s): Solomon W. Polachek, Carmel Chiswick, Hillel Rapoport ISBN: 978-0-76231-275-7 eISBN: 978-1-84950-390-7
Citation:	Michael Ben-Gad (2006), The impact of immigrant dynasties on wage inequality, in Solomon W. Polachek, Carmel Chiswick, Hillel Rapoport (ed.) The Economics of Immigration and Social Diversity (Research in Labor Economics, Volume 24), Emerald Group Publishing Limited, pp.77-134
DOI:	10.1016/S0147-9121(05)24003-7 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Article type:	Chapter Item
Abstract:	I construct a set of dynamic macroeconomic models to analyze the effect of unskilled immigration on wage inequality. The immigrants or their descendants do not remain unskilled – over time they may approach or exceed the general level of educational attainment. In the baseline model, the economy's capital supply is determined endogenously by the savings behavior of infinite-lived dynasties, and I also consider models in which the supply of capital is perfectly elastic, or exogenously determined. I derive a simple formula that determines the time discounted value of the skill premium enjoyed by college-educated workers following a change in the rate of immigration for unskilled workers, or a change in the degree or rate at which unskilled immigrants become skilled. I compare the calculations of the skill premiums to data from the US Current Population Survey to determine the long-run effect of different immigrant groups on wage inequality in the United States.