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Unformatted text preview: rsus services (health care and transfer payments) spent. a. Discuss figure from Borjas with immigration surplus. b. Estimate of size of surplus: increase in labor supply is 10 percent, implying a fall in the wage of 3-4 percent. Using a labor share of .7, area of triangle is .5 times base times height, or .5 x .03 x .1 x .7 = 0.1 percent of GDP. c. This calculation omits distribution of gains and losses, including among different ethnic, gender groups. d. It also omits reduction in prices, creating consumer surplus for all as well as additional demand for skilled workers who are complements with immigrants. e. Finally, it omits calculations as in the text that show that taxes paid (and refunds not collected) exceed services consumed....
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This note was uploaded on 06/06/2010 for the course ECON 151 taught by Professor Staff during the Spring '08 term at University of California, Berkeley.
- Spring '08