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Workers Without Borders? Culture, Migration and the Political Limits to Globalization

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  • Jain, Sanjay; Sumon Majumdarz, Sumon; Mukand, Sharun

    (Cambridge; Queens University; Warwick)

Abstract

This paper examines the role of cultural factors in driving the politics, size and nature (temporary versus permanent migration) of migration policy. We show that there exists a broad political failure that results in inefficiently high barriers restricting the import of temporary foreign workers and also admitting an inefficiently large number of permanent migrants. Strikingly, we show that countries that are poor at cultural assimilation are better positioned to take advantage of temporary foreign worker programs than more culturally diverse and tolerant countries. Furthermore, relaxing restrictions in the mobility of migrant workers across employers has the potential to raise host country welfare even though it increases migrant wages and lowers individual firms profits. We also demonstrate the existence of multiple equilibria: some countries have mostly temporary migration programs and see a low degree of cultural assimilation by migrants, while other countries rely more on permanent migrants and see much more assimilation.

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Bibliographic Info

Paper provided by Competitive Advantage in the Global Economy (CAGE) in its series CAGE Online Working Paper Series with number 19.

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Date of creation: 2010
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Handle: RePEc:cge:warwcg:19

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Keywords: International migration; political economy; political failure; culture; assimilation; multiple equilibria.;

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  1. Richard B. Freeman, 2006. "People Flows in Globalization," NBER Working Papers 12315, National Bureau of Economic Research, Inc.
  2. Facchini, Giovanni & Willmann, Gerald, 2005. "The political economy of international factor mobility," Journal of International Economics, Elsevier, vol. 67(1), pages 201-219, September.
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  4. George J. Borjas, 1994. "The Economic Benefits from Immigration," NBER Working Papers 4955, National Bureau of Economic Research, Inc.
  5. Bauer, Thomas K. & Lofstrom, Magnus & Zimmermann, Klaus F., 2000. "Immigration Policy, Assimilation of Immigrants and Natives' Sentiments towards Immigrants: Evidence from 12 OECD-Countries," IZA Discussion Papers 187, Institute for the Study of Labor (IZA).
  6. Dustmann, Christian, 1996. "Temporary Migration, Human Capital, and Language Fluency of Migrants," CEPR Discussion Papers 1376, C.E.P.R. Discussion Papers.
  7. Gianmarco I.P. Ottaviano & Giovanni Peri, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," NBER Working Papers 14188, National Bureau of Economic Research, Inc.
  8. Gordon H. Hanson, 2008. "The Economic Consequences of the International Migration of Labor," NBER Working Papers 14490, National Bureau of Economic Research, Inc.
  9. Besley, Timothy & Coate, Stephen, 1998. "Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 88(1), pages 139-56, March.
  10. Epstein, Gil S. & Gang, Ira N., 2008. "Ethnicity, Assimilation and Harassment in the Labor Market," IZA Discussion Papers 3591, Institute for the Study of Labor (IZA).
  11. Facchini, Giovanni & Mayda, Anna Maria, 2006. "Individual Attitudes Towards Immigrants: Welfare-State Determinants Across Countries," CEPR Discussion Papers 5702, C.E.P.R. Discussion Papers.
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  13. Stephen Morris & Stephen Coate, 1999. "Policy Persistence," American Economic Review, American Economic Association, vol. 89(5), pages 1327-1336, December.
  14. Geoffrey Carliner, 1995. "The Language Ability of U.S. Immigrants: Assimilation and Cohort Effects," NBER Working Papers 5222, National Bureau of Economic Research, Inc.
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  19. repec:aea:jeclit:v:43:y:2005:i:3:p:762-800 is not listed on IDEAS
  20. István Kónya, 2007. "Optimal Immigration and Cultural Assimilation," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 367-391.
  21. Walmsley, Terri Louise & Winters, L. Alan, 2003. "Relaxing the Restrictions on the Temporary Movements of Natural Persons: A Simulation Analysis," CEPR Discussion Papers 3719, C.E.P.R. Discussion Papers.
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  23. Alesina, Alberto & La Ferrara, Eliana, 2005. "Ethnic Diversity and Economic Performance," Scholarly Articles 4553005, Harvard University Department of Economics.
  24. Elhanan Helpman & Oleg Itskhoki & Stephen Redding, 2008. "Wages, Unemployment and Inequality with Heterogeneous Firms and Workers," NBER Working Papers 14122, National Bureau of Economic Research, Inc.
  25. Williamson, Jeffrey G., 1996. "Globalization, Convergence, and History," The Journal of Economic History, Cambridge University Press, vol. 56(02), pages 277-306, June.
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