LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 4P
To determine
The market clearing wage rate with and without immigration.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Suppose that the marginal revenue product of U.S. labor is given by MRP = 250 - L. Also, suppose that a total of Ln = 150 native-born U.S. workers supply their labor inelastically.
Assume further that the government allows 50 immigrant workers, who are perfect substitutes for native-born workers, to enter the United States.
What is the value of the immigration surplus?
Labor demand for low-skilled workers in the United States is w = 24 - 0.1 E where E is the number of workers (in millions) and w is the hourly wage. There are 120 million domestic U.S. low-skilled workers who supply labor inelastically. If the United States opened its borders to immigration, 20 million low-skill immigrants would enter the United States and supply labor inelastically. What is the market-clearing wage if immigration is not allowed? What is the market-clearing wage with open borders? How much is the immigration surplus when the United States opens its borders? How much surplus is transferred from domestic workers to domestic firms?
In addition to it being illegal to enter the U.S. without a visa or to over-stay one's visa, it is also illegal for U S. employers to hire undocumented or illegal immigrants. Meanwhile, federal U S. enforcement of immigration laws tend to concentrate resources on reducin gillegal immigration rather than on prosecuting U S. firms for employing undocumented workers. Using supply and demand analysis, show what would happen to the wage and employment level of undocumented workers if the government pursued more active enforcement of employers. According to your model, what would happen to the wage ansd employment level of documented workers?
Knowledge Booster
Similar questions
- The statements relate to immigration or inequity as it relates to immigration. Identify each statement as either true or false. Statement 1: Countries with even slightly higher standards of living should expect an influx of immigration from their neighboring countries if those countries have a lower standard of living. Statement 2: There is empirical evidence that immigration leads to large increases in unemployment, which causes wages to drop drastically. Statement 3: As a potential solution to an influx of immigration, Case, Fair, and Oster (2012) cite a study by the International Monetary Fund (IMF) stating that free trade can help to reduce inequity, thereby reducing the need for immigration. Statement 4: Immigration is a local, city‑wide concern as opposed to being a national, country‑wide concern because immigrants stay in the city where they first arrive. Statement 5: Technological change will not cause low‑skilled workers to immigrate to another country with a higher…arrow_forwardLet market demand for domestic workers be represented by Ed = 1000 - 50w where Ed is domestic labor demanded and w is the hourly wage. Suppose the domestic labor supply is represented by Es = 115w - 821. Now suppose that 106 immigrants that are perfect substitutes for native workers enter the market and their labor supply is perfectly inelastic. What is the equilibrium wage for all workers in this market after the immigrants enter?arrow_forwardSubstitutes Show the effects of immigration on the host country's labor market when domestic and foreign labor are perfect substitutes. Show the effects on worker and producer surplus.arrow_forward
- Complements Show the effects of immigration on the host country's labor market when domestic and foreign labor are perfect complements. Show the effects on worker and producer surplus.arrow_forwardThe table below shows the quantity demanded and supplied at various wage rates for a competitive market. Wage Rate Quantity of Workers Demanded Quantity of Workers Supplied $100 5 50 90 10 45 80 20 40 70 35 35 60 50 30 If the workers form a union and negotiate a weekly wage of $90, how many workers will be supplied and demanded? Multiple Choice The quantity demand will be 10 and the quantity supplied will be 35. The quantity demanded will be 10 and the quantity supplied will be 45. The quantity demand and supplied will both be 35. The quantity demanded will be 35 and the quantity supplied will be 45.arrow_forwardIn addition to it being illegal to enter the US without a visa or to over-stay one’s visa, it is also illegal for US employers to hire undocumented or “illegal” immigrants. Meanwhile, federal US enforcement of immigration laws tends to concentrate resources on reducing illegal immigration rather than on prosecuting US firms for employing undocumented workers. Using supply and demand analysis, show what would happen to the wage and employment level of undocumented workers if the government pursued more active enforcement of employers. According to your model, what would happen to the wage and employment level of documented workers?arrow_forward
- In addition to it being illegal to enter the US without a visa or to over-stay one’s visa, it is also illegal for US employers to hire undocumented or “illegal” immigrants. Meanwhile, federal US enforcement of immigration laws tends to concentrate resources on reducing illegal immigration rather than on prosecuting US firms for employing undocumented workers. Using supply and demand analysis, show what would happen to the wage and employment level of undocumented workers if the government pursued more active enforcement of employers. According to your model, what would happen to the wage and employment level of documented workers? (please explain with diagram)arrow_forwardIn addition to it being illegal to enter the U.S. without a visa or to over-stay one’s visa, it is also illegal for U.S. employers to hire undocumented or “illegal” immigrants. Meanwhile, federal U.S. enforcement of immigration laws tends to concentrate resources on reducing illegal immigration rather than on prosecuting U.S. firms for employing undocumented workers. Using supply and demand analysis, show what would happen to the wage and employment level of undocumented workers if the government reduced its efforts to prosecute employers. Please show by redrawing graph to visually include change.arrow_forwardIn addition to it being illegal to enter the U.S. without a visa or to over-stay one's visa, it is also illegal for U.S. employers to hire undocumented or "illegal" immigrants. Meanwhile, federal U.S. enforcement of immigration laws tends to concentrate resources on reducing illegal immigration rather than on prosecuting U.S. firms for employing undocumented workers. Using supply and demand analysis, show what would happen to the wage and employment level of undocumented workers if the government pursued more active enforcement of employers. Dollars Market for Undocumented Workers Supply X Demand E Employmentarrow_forward
- Question 3 of a diagram, 3.1 Explain, with the aid assume that the demand for low-skilled labour in South Africa is W=30100=E where E is the number of workers in (millions) and w is the hourly wage. There are 100 million fitters who labour supply is inelastic. If South Africa opened its borders to immigration of 10 million low skilled labourers - what would be the effect in the labour market?arrow_forwardSuppose a firm purchases labor in a competitive labor market and sells it product in a competitive product market. The firm's elasticity of demand for labor is -2.50. Suppose the wage increases by 4%. By what percentage will the quantity of labor hired by the firm change? Show your work.arrow_forward1. Computing labor productivity and its relationship to the demandfor labor Sizzler's produces charcoal grills in a small manufacturing facility and sells the grills in a competitive market. The following table presents the company's production function: Labor (Number of workers) 0 OUTPUT (Grills) 400 360 320 280 Use the blue points (circle symbol) to plot the production function for Sizzler's on the following graph. 240 200 160 120 80 40 0 1 0 2 3 4 5 1 Output (Grills) 0 95 185 260 320 355 2 3 LABOR (Number of workers) 4 5 Production Function (?) Calculate the marginal product of labor (MPL) of each worker, and then plot the MPL curve on the following graph using the blue points (circle symbol).arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning