| Summary: | The flow of immigrants between Europe and many other countries is often brought up in the discussion of the labor market. It is also questioned whether an increased immigration is beneficial for the society and the economy of the receiving country. This paper is an investigation of the above-mentioned problem “does immigration benefit a country’s economy and what are the effects of immigration on the economy?”. Furthermore, we will especially look at how immigration benefits the natives in the country with respect to labor and capital income. We will also investigate if there is a difference in education and skills between immigrants and natives and we will also examine the consequences of this. The discussion about benefits and liabilities to the society that has arisen, due to the welfare effects in the economy, will also be brought up and analyzed. The thesis work will mostly be a study of theoretical findings, where we will discuss the previous researches and important models, for instance Borjas (1999), who uses a model that gives a solid result of how much natives benefit from immigration in term of labor and capital earnings. To support the theoretical part, we have gathered the data from Eurostat and Swedish migration Authority, which will help to find some empirical results as well. This paper also includes a regression model that measures the change in the unemployment rate where the independent variables are GDP growth rate and immigration inflow.
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