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Self-Confirming Immigration Policy

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Author Info

  • Paolo E. Giordani
  • Michele Ruta

Abstract

We study immigration policy in a small receiving economy under self-selection of migrants. We show that a non-discriminatory immigration policy choice affects and is affected by the migratory decisions of skilled and unskilled foreign workers. From this interaction multiple equilibria may arise, which are driven by the natives’ expectations on the welfare effects of immigration. In particular, pessimistic (optimistic) beliefs induce a country to impose higher (lower) barriers to immigration, which crowd out (crowd in) skilled migrants and thus confirm initial beliefs. This self-fulfilling mechanism sustains the endogenous formation of an anti or pro-immigration prejudice. We discuss how the adoption of a skill-selective policy affects this result.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2012/wp-cesifo-2012-03/cesifo1_wp3762.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3762.

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Date of creation: 2012
Date of revision:
Handle: RePEc:ces:ceswps:_3762

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Related research

Keywords: immigration policy; skilled/unskilled workers; small economy; multiple equilibria;

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References

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  1. Paolo E. Giordani & Michele Ruta, 2009. "Prejudice and Immigration," Working Papers CELEG 0904, Dipartimento di Economia e Finanza, LUISS Guido Carli.
  2. Giovanni Facchini & Anna Maria Mayda, 2006. "Individual Attitudes towards Immigrants: Welfare-State Determinants Across Countries," CReAM Discussion Paper Series 0604, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  3. O'Rourke, Kevin H. & Sinnott, Richard, 2006. "The determinants of individual attitudes towards immigration," European Journal of Political Economy, Elsevier, vol. 22(4), pages 838-861, December.
  4. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-53, September.
  5. Levine, David & Fudenberg, Drew, 2006. "Superstition and Rational Learning," Scholarly Articles 3196330, Harvard University Department of Economics.
  6. Michéle V.K. Belot & Timothy J. Hatton, 2008. "Immigrant Selection in the OECD," CEPR Discussion Papers 571, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  7. Jaime MELO DE & Jean Marie GRETHER & Jean Claude MULLER, 2000. "The Political Economy of International Migration in a Ricardo-Viner Model," Working Papers 200021, CERDI.
  8. Facchini, Giovanni & Willmann, Gerald, 2005. "The political economy of international factor mobility," Journal of International Economics, Elsevier, vol. 67(1), pages 201-219, September.
  9. Hatton, Timothy J. & Williamson, Jeffrey G., 2004. "International Migration in the Long-Run: Positive Selection, Negative Selection and Policy," IZA Discussion Papers 1304, Institute for the Study of Labor (IZA).
  10. Jim Dolmas & Gregory W. Huffman, 2004. "On The Political Economy Of Immigration And Income Redistribution," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(4), pages 1129-1168, November.
  11. Giovanni Facchini & Anna Maria Mayda, 2008. "From individual attitudes towards migrants to migration policy outcomes: Theory and evidence," Economic Policy, CEPR & CES & MSH, vol. 23, pages 651-713, October.
  12. David McKenzie & Hillel Rapoport, 2010. "Self-Selection Patterns in Mexico-U.S. Migration: The Role of Migration Networks," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 811-821, November.
  13. Giordani, Paolo E. & Ruta, Michele, 2013. "Coordination failures in immigration policy," Journal of International Economics, Elsevier, vol. 89(1), pages 55-67.
  14. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
  15. Razin, Assaf & Sadka, Efraim & Suwankiri, Benjarong, 2011. "Migration and the Welfare State: Political-Economy Policy Formation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262016109, January.
  16. Giorgio Bellettini & Carlotta Berti Ceroni, 2007. "Immigration Policy, Self-selection, and the Quality of Immigrants," Review of International Economics, Wiley Blackwell, vol. 15(5), pages 869-877, November.
  17. Ortega, Francesc, 2005. "Immigration quotas and skill upgrading," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1841-1863, September.
  18. Cohen, Alon & Razin, Assaf, 2008. "The Skill Composition of Immigrants and the Generosity of the Welfare State: Free vs. Policy-Controlled Migration," CEPR Discussion Papers 7034, C.E.P.R. Discussion Papers.
  19. Benhabib, Jess, 1996. "On the political economy of immigration," European Economic Review, Elsevier, vol. 40(9), pages 1737-1743, December.
  20. Timothy J. Hatton & Jeffrey G. Williamson, 2008. "Global Migration and the World Economy: Two Centuries of Policy and Performance," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582775, January.
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Cited by:
  1. Paolo E. Giordani & Michele Ruta, 2011. "Coordination Failures in Immigration Policy," Working Papers CELEG 1101, Dipartimento di Economia e Finanza, LUISS Guido Carli.

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