This paper studies the impact of immigration on public policy setting. As a natural experiment, we exploit the sudden arrival of eight million forced migrants in West Germany after World War II. These migrants were on average poorer than the West German population, but unlike most international...

Based on the current European discussion about immigration policy, this paper gives an overview of central economic consequences of immigration for a host country's labor market. The most important theoretical arguments are presented and evaluated against the available empirical evidence. The...