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Explanation
This is because immigration into developed economies with labor shortages would
increase output and productivity that will spur economic growth Furthermore, for a
sending country, the remittance will lead to increased income and reduction in poverty
level that will sour their growth.
However, when majority of immigration into a country comprise of the unskilled
immigrants, further macro, micro- and socio- related challenges such as crime rates
might be experienced that might further affect the global economy negatively. In
addition, immigration may lead to lower wages for low-skilled workers and budget
challenges for the local governments, therefore further affecting the country negatively.
The labor services in the economy may take the form of size and demographic
composition of the population, labor- force participation rate, the number of hours
worked, and the quality of the labor force. The unique characteristics of labor supply
and demand determines the effect of economic growth in that, appropriate labor
market such as skilled labor could magnify the micro economic effects of migration
such as tolerance to racial differences, skill transfer, and supply of required output,
which will in turn spur economic growth.
On the contrary, regardless of the large-scale immigration and increase in foreign
labor force that comprise of unskilled or low skilled workers can be a hindrance to
productivity and will ultimately lower the economic growth on the native labor market.
References
International Monetary Fund. Research Dept. (n.d.). Chapter 4 the macroeconomic