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Optimal Immigration, Assimilation and Trade

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  • Istvan Konya

    ()
    (Boston College
    Boston College)

Abstract

The paper develops a general equilibrium model of migration, assimilation and trade, using a random matching framework of culture and trade. The market equilibrium and the social plannerÕs solution are contrasted and policy implications are given. The model predicts that the presence of immigrants who do not assimilate into the mainstream culture is economically inefficient, but whether such migration occurs depends on the underlying parameters. Because of the endogeneity of the migration decision, care must be taken to select the optimal policy instruments. In particular, subsidizing assimilation or auctioning immigration permits do not achieve the first best. Instead, a mix of selective immigration, border control and aid to the source country can be used to promote efficiency.

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Bibliographic Info

Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 507.

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Length: 32 pages
Date of creation: 01 Apr 2001
Date of revision:
Handle: RePEc:boc:bocoec:507

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Keywords: culture; immigration policy; optimal immigration;

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  1. Edward P. Lazear, 1995. "Culture and Language," NBER Working Papers 5249, National Bureau of Economic Research, Inc.
  2. John DiNardo & David Card, 2000. "Do Immigrant Inflows Lead to Native Outflows?," American Economic Review, American Economic Association, vol. 90(2), pages 360-367, May.
  3. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-53, September.
  4. Istvan Konya, 2002. "Modeling cultural barriers in international trade," Boston College Working Papers in Economics 547, Boston College Department of Economics.
  5. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1, June.
  6. Casella, Alessandra & Rauch, James E, 1998. "Overcoming Informational Barriers to International Resource Allocation: Prices and Group Ties," CEPR Discussion Papers 1978, C.E.P.R. Discussion Papers.
  7. Joseph G. Altonji & David Card, 1989. "The Effects of Immigration on the Labor Market Outcomes of Natives," NBER Working Papers 3123, National Bureau of Economic Research, Inc.
  8. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier.
  9. Alan J. Auerbach & Philip Oreopoulos, 1999. "Generational Accounting and Immigration in the United States," NBER Working Papers 7041, National Bureau of Economic Research, Inc.
  10. Kjetil Storesletten, 2000. "Sustaining Fiscal Policy through Immigration," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 300-323, April.
  11. Daniel Trefler, 1997. "Immigrants and Natives in General Equilibrium Trade Models," NBER Working Papers 6209, National Bureau of Economic Research, Inc.
  12. James R. Markusen & Stephen Zahniser, 1997. "Liberalization and Incentives for Labor Migration: Theory with Applications to NAFTA," NBER Working Papers 6232, National Bureau of Economic Research, Inc.
  13. Gordon H. Hanson & Matthew J. Slaughter, 1999. "The Rybczynski Theorem, Factor-Price Equalization, and Immigration: Evidence from U.S. States," NBER Working Papers 7074, National Bureau of Economic Research, Inc.
  14. Burda, Michael C & Wyplosz, Charles, 1991. "Human Capital, Investment and Migration in an Integrated Europe," CEPR Discussion Papers 614, C.E.P.R. Discussion Papers.
  15. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
  16. John F. Helliwell, 1997. "National Borders, Trade and Migration," NBER Working Papers 6027, National Bureau of Economic Research, Inc.
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