Consider Roys model of immigration As the destination countr

Consider Roy\'s model of immigration. As the destination country\'s skill earnings profile shifts from line A to line B:

Select one:

a. People with lowest skills in the destination country become less opposed to immigration.

b. People with mid-level skills in the destination country become more opposed to immigration.

c. immigration surplus rises in the source country.

d. Stolper Samuelson result does not hold.

Solution

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Answer

As per Roy\'s model of immigration we can clearly see that the source countries\' skill has increased on the line p and from point S1 to S2 on the skills scale. This clearly shows that the shift in the graph from point A to point B has resulted into increase in the quality of skills of the source country.

Based on the above analysis we can say that point C which is immigration surplus rises in the source country is the correct option. This will happen because people who were of destination country have moved to the source country and this has given rise to the skill set and the increase of scales of immigrant labours. Overall the product picture is skill have risen an immigration surplus has increased in the source country.