Usind supply and demand analysis, evaluate the possible effects of net imigration on wage and employment level

Answer 1

Some of the other answers have some merit, but the situation is much more complicated. Labor, capital, firms, and wages are all connected in a very intricate way.

If you have an influx of migrants, this will definitely shift the supply curve of labor to the right. This will push down wages in the short run.

However, that is only half the strory. First, the new workers might attract additional firms and capital to the region, which could actually make wages rise in the longer run. This would then strenthen the local economy in many ways.

This would the opposite of what happened in the industrial cities of the US, where firms started closing down, workers became unemployed and left, incomes stagnated, and more firms were forced out of business.

Answer 2

An increase in the emigrant population increases both the supply and demand for labor because they both work and consume so the number of jobs will increase. If it is not also accompanied by an increase in capital investment it will decrease the capital investment per worker which would lower the average real wage. If skill level of the new workers does not match the native population, it will also have distributional effects and the occupations that have fewer emigrant workers will rise and those with more will fall. An example of this is the decline in the wage of computer programmers when the US gave preference to emigrates with high tech skills in the 90's.

Answer 3

For a positive net imigration, supply curve shifts right since number of people willing to work increase, This implies a decrease in wage and increase in employment level. employment level will increase because firms can hire more workers for lesser wage. Practicle case of Britain where wages have decreased due to presence of more immigrints.

Answer 4

Depends, in a macroeconomic sense a larger consumer base increases transactions and tax revenue...

Only rich people with a high marginal propensity to save adversely affect the economic environment.

Answer 5

.