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Figure 6. Impulse responses to a positive neutral technology shock in Home, low vs. high sunk emigration cost

1.5

1

0.5

Low Border Enforcement

6

High Border Enforcement

4

2

Home Output

I m m i g r a n t l a b o r e n t r y ( L e )

0.8

0.6

0.4

I m m i g r a n t l a b o r s t o c k ( L i )

0.2

0

0

0

0

10

20

30

40

0

10 20 30

40

0

10 20 30

40

Employment Unskilled

W a g e o f i m m i g r a n t l a b o r ( w i )

W a g e o f H o m e s k i l l e d ( w s )

0.6

0.4

0.2

0

  • -

    0.2

0

10

20

30

40

1.5

1

0.5

0

  • 0

    10

20

30

40

1

0.8

0.6

0.4

0.2

0

10

20

30

40

Wage in Foreign (w*)

Remit. per immig.

Total Remittances

0.4

1

1

0.3

0.2

0.5

0.5

0.1

0

0

0

0

10

20

30

40

  • 0

    10

20

30

40

  • 0

    10

20

30

40

N o t e : I m p u l s e r e s p o n s e t o a p o s i t i v e n e u t r a l t e c h n o l o g y s h o c k a t t h e m e d i a n o f t h e e s t i m a t e d p a r a m e t e r s w i t h t h e e x c e p t i o n o f f e ( w h i c h w e s e t a s f e = 1 f o r l o w b o r d e r e n f o r c e m e n t , a n d f e = 6 f o r h i g h b o r d e r e n f o r c e m e n t ) . F o r m o d e l c o m p a r i s o n s , w e e x p r e s s impulse responses as percentage deviations from steady-state. In each case, we plot the impulse responses to a 1% increase in neutral technology in Home. t h e

Figure 7. Impulse responses to a positive neutral technology shock in Home, financial autarky vs. integration

Immigrant labor entry (Le)

Immigrant labor stock (Li)

Employment of Unskilled (Lu)

0.8

0.25

0.4

0.6

Financial Autarky Financial Integration

0.2

0.3

0.4

0.2

0

0

10

20

30

40

0.15

0.1

0.05

0

0

10

20

30

40

0.2

0.1

0

  • -

    0.1

    • 0

      10

20

30

40

Capital stock, Foreign (K*)

Wage of immigrant labor (wi)

Consumption, Foreign (C*)

0.3

1.5

0.2

0.2

0.18

1

0.16

0.1

0.14

0.5

0

0.12

  • -

    0.1

0

0.1

0

10

20

30

40

0

10

20

30

40

  • 0

    10

20

30

40

Remittances per immigrant

1

0.8

0.6

0.4

0.2

0

  • 0

    10

20

30

40

Trade Balance / Home GDP

1

0

  • -

    1

  • -

    2

  • -

    3

  • -

    4

    • 0

      10

20

30

40

1

0.8

0.6

0.4

0.2

0

0

10

Total Remittances

20

30

40

Note: Impulse responses to a positive neutral technology shock at the median of the estimated parameters, expressed as percentage deviations from steady-state.

37

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