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Strategic immigration policies and welfare in heterogeneous countries

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  • FUJITA, Masahisa
  • WEBER, Shlomo

Abstract

In this paper we consider a model with two industrialized countries and immigrants that come from "the rest of the world".The countries are distinguished on the basis of three parameters: population size, bias toward immigrants, and production complementarity between native population and immigrants. We consider a non-cooperative game where each country makes a strategic choice of its immigration quota. We first show that our game admits a unique pure strategy Nash equilibrium and then study the welfare implications of countries' choices. It turns out that a country with a higher degree of production complementarity and a higher level of tolerance towards immigrants would allow a larger immigration quota and achieve a higher welfare level. Our results call for coordinated and harmonized immigration policies that may improve the welfare of both countries.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2003095.

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Date of creation: 00 Dec 2003
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Handle: RePEc:cor:louvco:2003095

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Related research

Keywords: immigration quotas; heterogeneity; production comple- mentarity; welfare; policy harmonization;

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References

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  1. Joan-Maria Esteban & Debraj Ray, 1991. "On the Measurement of Polarization," Boston University - Institute for Economic Development 18, Boston University, Institute for Economic Development.
  2. Richard Florida, 2002. "Bohemia and economic geography," Journal of Economic Geography, Oxford University Press, vol. 2(1), pages 55-71, January.
  3. Carole Juliette Maignan (ed.) & Gianmarco Ottaviano (ed.) & Dino Pinelli (ed.), 2003. "Economic Growth, Innovation, Cultural Diversity. What Are We All Talking About? A Critical Survey of the State-of-the-art," Working Papers 2003.12, Fondazione Eni Enrico Mattei.
  4. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-28, June.
  5. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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Cited by:
  1. Annekatrin Niebuhr, 2006. "Migration and Innovation - Does Cultural Diversity Matter for Regional R&D Activity?," ERSA conference papers ersa06p31, European Regional Science Association.
  2. Masahisa Fujita & Marcus Berliant, 2004. "Knowledge Creation as a Square Dance on the Hilbert Cube," Econometric Society 2004 North American Summer Meetings 204, Econometric Society.
  3. Stephan Brunow & Valentina Nafts, 2013. "What types of firms tend to be more innovative: A study on Germany," Norface Discussion Paper Series 2013021, Norface Research Programme on Migration, Department of Economics, University College London.
  4. Dr Max Nathan, 2013. "The Wider Economic Impacts Of High-Skilled Migrants: A Survey Of The Literature," NIESR Discussion Papers 11607, National Institute of Economic and Social Research.
  5. Thomas Kemeny, 2013. "Immigrant Diversity and Economic Development in Cities: A Critical Review," SERC Discussion Papers 0149, Spatial Economics Research Centre, LSE.

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