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Casting the naturalization of asylum seekers as an economic problem

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  • Stark, Oded

Abstract

The naturalization of asylum seekers is modeled as an economic problem. In choosing their level of investment in host-country-specific human capital, asylum seekers take into consideration the probability of their being naturalized. The government of the host country chooses the probability of naturalization that most encourages the acquisition of such human capital. That human capital, in turn, increases the asylum seekers’ productivity and earnings and, consequently, maximizes the government’s tax receipts if the asylum seekers are allowed to stay permanently. Conditions are presented under which the optimal level of investment in the host-country-specific human capital is positive, and rises in the probability of naturalization. The asylum seeker’s rational response to the probability of (legal) long-term residency is incorporated in the government’s optimization process. Thus, both the asylum seekers and the government of their host country are modeled as optimizing economic agents in a setting not of their own choosing.

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Bibliographic Info

Paper provided by University of Bonn, Center for Development Research (ZEF) in its series Discussion Papers with number 62160.

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Date of creation: May 2010
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Handle: RePEc:ags:ubzefd:62160

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Keywords: The probability of naturalization; Investment in host-country-specific human capital; Economic behavior of asylum seekers; Economic behavior of the government of the host country; Stackelberg game; Financial Economics; Labor and Human Capital; Political Economy; A13; F20; J24; J41; J61;

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  1. Timothy J. Hatton, 2004. "Seeking asylum in Europe," Economic Policy, CEPR & CES & MSH, vol. 19(38), pages 5-62, 04.
  2. Ortega, Francesc, 2005. "Immigration quotas and skill upgrading," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1841-1863, September.
  3. Giovanni Facchini & Oliver Lorz & Gerald Willmann, 2006. "Asylum seekers in Europe: the warm glow of a hot potato," Journal of Population Economics, Springer, vol. 19(2), pages 411-430, June.
  4. Fabio, MARIANI, 2004. "The Political Economy of Immigrants Naturalization," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2004022, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
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