Suppose the transferability of skills from an origin to a destination increase. What is likely to happen to immigrants' wages relative to natives' wages in the destination? what do you think will happen to immigrants' skill acquisition in the destination, and why?
Suppose the transferability of skills from an origin to a destination increase. What is likely to happen to immigrants' wages relative to natives' wages in the destination? what do you think will happen to immigrants' skill acquisition in the destination, and why?
When the transferability of skills from an origin country to a destination country increases, immigrants are better able to apply their existing skills and knowledge in the new environment. This could lead to several outcomes:
1) Wage Convergence:
As immigrants can more easily utilize their skills in the destination country, there is a higher likelihood of wage convergence between immigrants and native workers. This means that immigrants' wages are more likely to approach, and potentially even equal, the wages of native workers who possess similar skills and experience.
2) Increased Competition:
With the improved transferability of skills, immigrants may compete more effectively with native workers in sectors that demand their skills. This heightened competition could put some downward pressure on wages in those specific sectors, which might affect both immigrants and natives.
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