Abstract
This paper examines the income, employment and distributional impact of immigration on a recipient economy facing an administered wage distortion. It is found that immigration increases the unemployment rate of the native population and shifts income distribution against labor and in favor of the nonlabor input. Its effect on the total income of the non-immigrants is, however, ambiguous, and depends on the relative importance of the increase in unemployment versus the net increase in the rent received by the owners of the non-labor input.
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