Strategic Immigration Policies and Welfare in Heterogeneous Countries
AbstractIn this paper we consider a model with two industrialised countries and immigrants that come from “the rest of the world”. The countries are distinguished on the basis of three parameters: population size, bias towards 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 quotas. 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 county 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 harmonised immigration policies that may improve the welfare of both countries.
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Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2004.2.
Date of creation: Jan 2004
Date of revision:
Immigration quotas; Heterogeneity; Production complementarity; Welfare; Policy Harmonisation;
Other versions of this item:
- FUJITA, Masahisa & WEBER, Shlomo, 2003. "Strategic immigration policies and welfare in heterogeneous countries," CORE Discussion Papers 2003095, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Masahisa Fujita & Shlomo Weber, 2003. "Strategic Immigration Policies and Welfare in Heterogeneous Countries," KIER Working Papers 569, Kyoto University, Institute of Economic Research.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
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