Optimal Immigration Policy When the Public Good Is Rival
AbstractIn this model, we characterize optimal immigration and fiscal policies in presence of a rival public good and heterogeneous discounting. Surprisingly, even if the government is benevolent towards natives only, it is optimal to keep borders open. Indeed, in the long run, patient natives hold the whole stock of capital, while impatient immigrants work. Moreover, since capital intensity is stationary, capital per native, consumption and the public good increase with the number of (immigrant) workers. This positive effect offsets the disutility deriving from the congestion of the public good. Howevern when we account for the costs associated to cultural heterogeneity, we find that it is optimal to regulate immigration inflows. We also interpret the long-run sensitivity of the optimal policy mix with respect to the fundamentals.
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Date of creation: Nov 2010
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Heterogenous discounting; public good; immigration policy; cycles.;
Other versions of this item:
- Stefano Bosi & Eleni Iliopulos & Hubert Jayet, 2011. "Optimal Immigration Policy: When The Public Good Is Rival," The Japanese Economic Review, Japanese Economic Association, vol. 62(4), pages 460-484, December.
- Stefano Bosi & Eleni Iliopulos & Hubert Jayet, 2010. "Optimal immigration policy when the public good is rival," Documents de travail du Centre d'Economie de la Sorbonne 10095, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-18 (All new papers)
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