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Time-consistent immigration policy under economic and cultural externalities

Author

Listed:
  • Alberto Bisin
  • Giulio Zanella

Abstract

SUMMARYDiscussions of immigration policy are typically framed in the context of their economic effects in receiving countries, notably labour market and fiscal effects. In this paper, we characterize immigration policy in a richer model where migrants are also a source of cultural externalities stemming from either preferences or the functioning of formal and informal institutions in receiving countries. While in terms of pure economic effects, immigrants do not generally have any more incentives than low-skilled natives to allow for more immigration in the future, this is not the case when accounting for cultural externalities. Therefore, insofar as past immigrants have a voice in affecting future policies, a time-consistent immigration policy entails back-loading; as natives attempt at limiting voice of immigrants in the future, the economic effects of immigration flows as well as the cultural externality they introduce. Furthermore, natives exploit any pre-commitment device to limit immigration flows, e.g. building ‘‘walls’’, limiting immigrants’ political rights, or accumulating fiscal surpluses.

Suggested Citation

  • Alberto Bisin & Giulio Zanella, 2017. "Time-consistent immigration policy under economic and cultural externalities," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 32(91), pages 415-446.
    • Handle: RePEc:oup:ecpoli:v:32:y:2017:i:91:p:415-446.
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    File URL: http://hdl.handle.net/10.1093/epolic/eix010
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    Citations

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    Cited by:

    1. Andrea F.M. Martinangeli & Lisa Windsteiger, 2019. "Immigration vs. Poverty: Causal Impact on Demand for Redistribution in a Survey Experiment," Working Papers tax-mpg-rps-2019-13, Max Planck Institute for Tax Law and Public Finance.
    2. Bisin, Alberto & Tura, Giulia, 2019. "Marriage, Fertility, and Cultural Integration in Italy," CEPR Discussion Papers 14179, C.E.P.R. Discussion Papers.
    3. Martinangeli, Andrea F.M. & Windsteiger, Lisa, 2023. "Immigration vs. poverty: Causal impact on demand for redistribution in a survey experiment," European Journal of Political Economy, Elsevier, vol. 78(C).
    4. Elisabetta Lazzaro, 2021. "Linking the Creative Economy with Universities’ Entrepreneurship: A Spillover Approach," Sustainability, MDPI, vol. 13(3), pages 1-12, January.
    5. Alberto Bisin & Giulia Tura, 2019. "Marriage, Fertility, and Cultural Integration of Immigrants in Italy," Working Papers 2019-063, Human Capital and Economic Opportunity Working Group.
    6. Matija Kovacic & Cristina Elisa Orso, 2023. "Who’s afraid of immigration? The effect of economic preferences on tolerance," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(3), pages 1901-1940, July.

    More about this item

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • Z1 - Other Special Topics - - Cultural Economics

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