This paper investigates the theoretical effects of immigration in an occupational

choice model with three sectors: a low-skilled, a high-skilled and a public

sector. The originality of our approach is to consider (i) intersectoral mobility

of labor and (ii) public employment. We highlight the fact that including a

public sector is crucial, since omitting it implies that low-skilled immigration unambiguously

reduces wages and welfare of all workers. However, when public

employment is considered, we demonstrate that immigration increases wages in

the high-skilled and the public sectors, provided that the immigrant workforce

is not too large and the access to public jobs is not too easy. The average wage

of natives may also increase accordingly. Moreover, immigration may improve

workers’ welfare in each sector. Finally, the mechanism underlying these results

does not require complementarity between natives and immigrants.