1. The Migration Surplus
Economics 428
Fall 2012

2. Unitary Labor Market (Immigrants are substitutes)
Output W1 A B W2 C
MRP L1 L2
Labor

3. The Impact of Migration on Unitary Labor Markets
A is the transfer of surplus from workers to employers.
B + C is the increased output due to immigration.
C is the output going to the migrants.
B is the immigration surplus going to the receiving nation.

4. Segmented Labor Market (Immigrants are comlpiments)
Wage wN A w1 B
mrp2 wM C
mrp1
Labor L1 L2

5. The Impact of Migration on Segmented Labor Markets
A is the gain in surplus by native workers
B + C is the increased output due to immigration.
C is the output going to the migrants.
B is the immigration surplus going to the receiving nation.

6. Thank You