How skilled immigration may improve economic equality

Abstract

Mobile workers involve flows of labor and human capital and contribute to a moreefficient allocation of resources. However, migration also changes relative wages,alters the distribution of skills and affects equality in the receiving society. Thepaper suggests that skilled immigration promotes economic equality in advancedeconomies under standard conditions. This is discussed and theoretically derived in acore model, and empirically supported using unique data from the WIID database andOECD. JEL codes: D33; E25; F22; J15; J61; O15