Less restrictive immigration policies can impact the labor supply curve and wage equilibrium.
When implementing less restrictive immigration policies that lead to a large share of low-skilled immigrants, it would shift the market labor supply curve to the right. This increase in labor supply can potentially lower wages due to the greater availability of workers in the market.
On the other hand, reducing the number of immigrants would shift the supply curve of low-skill labor back to the left, leading to a potential rise in wage equilibrium for low-skill labor.
Therefore, changes in immigration policies can significantly impact the supply of labor in the market and consequently influence wage levels and economic equilibrium.
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