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Notes to Understand Migration Policy with International Trade Theoretical Tools

Author

Listed:
  • Cebreros Alfonso
  • Chiquiar Daniel
  • Roa Mónica
  • Tobal Martín

Abstract

This paper develops a standard model of international trade and makes three contributions. First, it shows that when the welfare function of the recipient country reflects the utility of natives, free-trade and free-migration generate isomorphic results, that is, they increase overall welfare but redistribute income by reducing the returns of the scarce factor. Although this result is frequently evoked in academic circles, this document shows that the equivalence holds for the most relevant measure of welfare from a political economy perspective. Second, this equivalence is extended to the public policy domain: for each level of trade restrictions mutually imposed, it is found an immigration tax that generates the same redistribution and welfare impacts. Third, in the light of these results, the model is enlarged to illustrate a channel through which political economy concerns may influence immigration policy.

Suggested Citation

  • Cebreros Alfonso & Chiquiar Daniel & Roa Mónica & Tobal Martín, 2017. "Notes to Understand Migration Policy with International Trade Theoretical Tools," Working Papers 2017-03, Banco de México.
    • Handle: RePEc:bdm:wpaper:2017-03
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    International Migration; Political Economy; International Trade;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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