Love of Variety and Immigration
AbstractThis paper develops a political-economic analysis of immigration in a developed country that operates in a direct democracy regime. It shows that, in a monopolistic competitive environment with differentiated capital intensive commodities produced under increasing returns to scale, labor liberalization is more likely to come about in the societies that have more taste for varieties. This is due to the availability of more and cheaper varieties. It also shows that, the workers and capital owners could share the same positive stance toward labor liberalization. It follows that the latter is impossible in a perfect competitive environment. Finally, in a two period dynamic model with forward looking voters, it demonstrates that the median voter is willing to accept fewer immigrants in the first period, in order to preserve her domestic political influence in the second period due to the naturalization of the immigrants accepted in the first period. Using this strategy, the median voter maximizes her gains from immigration by accepting more immigrants in total at the end of the second period. However, the richer the forward looking median voter, the less restricted will be the policy of the host country toward immigration in the first period.
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Bibliographic InfoPaper provided by Florida International University, Department of Economics in its series Working Papers with number 0911.
Length: 34 pages
Date of creation: Sep 2009
Date of revision:
Immigration; Long Run General Equilibrium; Direct Democracy; Perfect Competition; Monopolistic Competition; Factor Price Equalization.;
Find related papers by JEL classification:
- D41 - Microeconomics - - Market Structure and Pricing - - - Perfect Competition
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-26 (All new papers)
- NEP-MIG-2009-09-26 (Economics of Human Migration)
- NEP-POL-2009-09-26 (Positive Political Economics)
You can help add them by filling out this form.
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