Immigration

Question 1

What is immigration?

Answer 1

The action of coming to live permanently in a foreign country.

Question 2

Positive impacts on the macro economy?

Answer 2

1. Increase tax revenues
2. Increase productive capacity - expansion of labour supply
3. Reduced pressure on wage inflation
4. Increase AD - higher trend growth

Question 3

Negative impacts on macro economy?

Answer 3

1. Increase constraint on public services
2. Spending on benefits
3. Unemployment
4. General pressure on scarce resources

Question 4

Positive impacts on labour market?

Answer 4

1. Fills skills shortages
2. Delays ageing population - interjection of workers
3. Higher productivity in some markets
4. Some work will be complements - increasing the employment rate of another job
5. Increases labour market flexibility

Question 5

Negative impacts on labour market?

Answer 5

1. Increase unemployment
2. Increase in labour supply - lowers wages - more workers cut back on time devoted to work
3. Doubts about productivity - immigrants typically have lower educational levels
4. Depends on types of labour migrating