Abstract

This article uses a well-defined setting to suggest an optimistic view about the distributional effects of immigration. Section 2 provides a general picture of the native-immigrant differences in labour force participation, unemployment, and occupational and educational attainment, taking skill levels and years since immigration into account. Section 3 investigates the inequality impact of immigration by summarizing the potential labour market impacts and the wage and employment consequences. Section 4 deals with the potentially slow integration of immigrants into the labour market of the host country, as well as with the role that self-selection and selection through politically set admission rules can play for the performance in the labour market. It also considers cultural or ethnic identity as an independent factor potentially affecting economic success and discusses the consequences for inequality. Section 5 concludes.