This paper analyses the impact of immigration on the welfare of the native population in an economy that consists of skilled and unskilled workers. Due to unionisation, the wage rate in the market for unskilled labour is above the competitive level. For a given skill endowment of the native...

Based on the current European discussion about immigration policy, this paper gives an overview of central economic consequences of immigration for a host country's labor market. The most important theoretical arguments are presented and evaluated against the available empirical evidence. The...