Suppose the United States enacts legislation granting all workers, including newly arrived immigrants, a minimum income floor of y y( dollars. (Assume there is positive selection of migrants from the home country to the U.S.)
(a) Generalize the Roy model to show how this type of welfare program influences the incentive to migrate to the United States. Ignore any issues regarding how the welfare program is funded.
(b) Does this welfare program change the selection of the immigrant flow? In particular, are immigrants more likely to be negatively selected than in the absence of a welfare program?
(c) Which types of workers, the highly skilled or the less skilled, are most likely to be attracted by the welfare program?