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it is widely expected that the number of unauthorized immigrants moving into the United States in 2021 will rise. Suppose that the number of unauthorized
it is widely expected that the number of unauthorized immigrants moving into the United States in 2021 will rise. Suppose that the number of unauthorized immigrants from Mexico indeed increases over the next year. (assume that workers have similar levels of education, etc. are closer substitutes than those with different levels of education, etc.) Section 1) Assuming that unauthorized immigrants from Mexico have on average less education and English skills than native workers, what would economic theory predict about the impact of an in the number of illegal immigrants on the wages of workers with similar skill levels in the United States? Section 2) If it was found that the elasticity of substitution between low-skilled workers and other inputs to production (like machines) is high, how would this affect the elasticity of labor demand and how would this affect the outcome of section (1). Section 3) Given the outcome of Section 1, what would economic theory predict about the impact of a reduction in the number of illegal immigrants on the wages of high-skilled workers in the United States? discuss the scale effect and the substitution effect. Section 4) How does the outcome of section 1 and Section 3 change in the "long run"? Explain using a graph
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