Low-Skilled Immigration and th Expansion of Private Schools

This paper studies the impact of low-skilled immigration on the host country’s education system, which is characterized by sources of school funding, expenditres per pupil, and types of parents who are more likely to send children to publicly (privately) funded schools. When the size of low-skilled immigrants is large, it is found that wealthier natives are likely to opt out from public into private schools. Four main effects of immigration are taken into account : (1) greater congestion in public school; (2) lower average tax base for education funding; (3) reduced low-skilled wage and so more low-skilled natives to privately invest in their children’s education and hence weakens their support to finance public school. The theoretical predictions are not at odds with cross-country stylized facts revealed in both micro and macro data. Moreover, with endogenous fertility, the opting-out decision taken by some native parents results in the empirically observed fertility differential between natives and immigrants