This paper uses a dynamic efficiency-wage model to analyze the consequences of immigration for a small country when there is discrimination against immigrants in a dual labor market with unemployment. Discrimination is of the type 'equal pay for equal work, but unequal work' which is...

In this paper, we provide new explanations for the puzzling findings in the literature that migrants do not decrease natives' wages, and that skilled immigration can actually increase them. We develop a model with regional labor markets and heterogeneous firms in which workers of different skill...