Assuming migration is unimpeded and costless, which of the following statements is most accurate about the effect of immigration on wages in both the origin and destination nations?

A) Wages will rise in the origin nation and fall in the destination nation, and overall wage income must rise.
B) Wages will rise in both nations, and overall wage income must rise.
C) Wages will rise in the origin nation and fall in the destination nation, and the wage changes must cancel each other, resulting in no net change in overall wage income.
D) Wages will rise in the origin nation and fall in the destination nation, but the effect on overall wage income depends on the elasticities of labor demand.

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sonia sodemba · Accepted Answer

Final Answer : D, Explanation :  The correct answer is D because when workers migrate from the origin nation to the destination nation, the labor supply decreases in the origin nation, leading to higher wages there. Conversely, the labor supply increases in the destination nation, potentially leading to lower wages. However, the overall effect on wage income depends on the elasticities of labor demand in both nations, which determine how much wages adjust in response to changes in labor supply.

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