As immigration continues to rise throughout the Western world, the question of the economic impact of immigration on the host country labor market is moving to the center of the public debate. The concern that competition from immigrants may hurt the wages and employment prospects of low skilled natives is among the factors that drive negative attitudes toward immigrants in Europe and the USA. Despite this widespread sentiment, the economic literature has failed to find conclusive evidence for an adverse effect of immigration on natives’ labor market outcomes. In this paper, we try to shed additional light on this issue by studying the impact of the mass migration to Israel of the 1990s. From 1989 to 2000 more than 1 million Jews migrated from the former Soviet-Union (FSU) to Israel, increasing its population and labor force by extraordinary magnitude.
The main novel feature of our work is the attempt to distinguish between the short and long run effects of immigration on the labor market. Much of the existing literature has assumed that the effect of a given immigration wave is uniform over time. However, there are reasons to believe that this is not the case. For example, if immigrants are relatively close substitutes to natives when they land in the host country, we would expect to see an immediate impact on wages and employment, as the stock of capital and other factors of production are fixed in the short run. However, as time goes by, capital and labor adjust, so that the medium and long run response will be smaller, and, under certain assumptions, potentially even zero. An alternative possibility is that upon arrival, immigrants are poor substitutes for native workers, since their imported human capital is not transferable to the host economy (Friedberg, 2000; Eckstein and Weiss, 2003). Therefore, the immediate impact of immigration on natives’ labor market outcomes is close to zero; nevertheless, as immigrants acquire local labor market skills, they compete with native workers, so that the medium and long run effects on natives’ outcomes might be substantial.
What do women really want? What do men really want? What does anyone really want? To sum it up in one word: happiness! Happiness is a feeling with many meanings for different people. In the world of relationships happiness usually means feeling good about oneself and feeling good about the other person. Unfortunately, in today's world this occurs with less frequency.
A key question in development economics is the relation between a country's financial system and its economic development. Historians such as Gerschenkron (1962) have sought to explain a perceived relation between the differences in the pattern of economic development between Britain and the Continental European economies and the differences between bank-based and market based financial systems. More recently, the differences in the relative performance of the Japanese and the US economies have led observers to conclude that bank-based and market-based financial systems may produce different growth patterns.
