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Optimal Immigration Policy: Permanent, Guest-Worker, or Mode IV?

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  • Schiff, Maurice

    ()
    (World Bank)

Abstract

Host countries have implemented permanent and guest-worker (GW) immigration programs in recent decades, while the temporary movement of service providers under Mode IV of the GATS is one of the issues being negotiated at the Doha Round of the WTO. Though decisions on what programs to adopt have acquired increased urgency, the task has been complicated by host countries’ concern with migrants’ massive overstaying in past GW programs. This paper contributes to the debate by examining these migration regimes in a model in which the host country maximizes an objective function with respect to i) the size of the migration program, and – in the case of temporary migration – ii) the value of a bond employers must buy and iii) the share of migrants’ income whose payment is deferred. The maximization also takes into account the impact of the policy on source country cooperation on illegal immigration, migrants’ incentives and their preference for overstaying. The model solves for the policy measures, the overstaying probability, and the level of illegal migration. The paper concludes that the optimal policy is a combination of Mode IV-type and permanent migration.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2871.

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Length: 25 pages
Date of creation: Jun 2007
Date of revision:
Handle: RePEc:iza:izadps:dp2871

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Keywords: policy; immigration; permanent; guest-worker; Mode IV; illegal; cooperation;

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References

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  1. Grossman, Gene & Helpman, Elhanan, 1993. "Protection for Sale," CEPR Discussion Papers, C.E.P.R. Discussion Papers 827, C.E.P.R. Discussion Papers.
  2. Dustmann, Christian, 1997. "Return migration, uncertainty and precautionary savings," Journal of Development Economics, Elsevier, Elsevier, vol. 52(2), pages 295-316, April.
  3. Jaime MELO DE & Jean Marie GRETHER & Jean Claude MULLER, 2000. "The Political Economy of International Migration in a Ricardo-Viner Model," Working Papers 200021, CERDI.
  4. Constant, Amelie & Zimmermann, Klaus F, 2007. "Circular Migration: Counts of Exits and Years Away from the Host Country," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6438, C.E.P.R. Discussion Papers.
  5. Epstein, Gil S & Hillman, Arye L. & Weiss, Avi, 1998. "Creating Illegal Immigrants," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1796, C.E.P.R. Discussion Papers.
  6. Holzmann, Robert & Munz, Rainer, 2004. "Challenges and opportunities of international migration for the EU, its member states, neighboring countries, and regions : a Policy Note," Social Protection Discussion Papers 30160, The World Bank.
  7. Aaditya Mattoo & Antonia Carzaniga, 2003. "Moving People to Deliver Services," World Bank Publications, The World Bank, number 15088, August.
  8. Ruhs, Martin & Chang, Ha-Joon, 2004. "The Ethics of Labor Immigration Policy," International Organization, Cambridge University Press, Cambridge University Press, vol. 58(01), pages 69-102, February.
  9. Amin, Mohammad & Mattoo, Aaditya, 2005. "Does temporary migration have to be permanent?," Policy Research Working Paper Series 3582, The World Bank.
  10. Francisco L. Rivera-Batiz, 1999. "Undocumented workers in the labor market: An analysis of the earnings of legal and illegal Mexican immigrants in the United States," Journal of Population Economics, Springer, Springer, vol. 12(1), pages 91-116.
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Cited by:
  1. Docquier, Frederic & Schiff, Maurice, 2009. "Measuring Skilled Migration Rates: The Case of Small States," Policy Research Working Paper Series 4827, The World Bank.
  2. Jesús Fernández-Huertas Moraga, 2008. "A General Model of Bilateral Migration Agreements," UFAE and IAE Working Papers, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) 755.08, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  3. Gordon H. Hanson, 2009. "The Economic Consequences of the International Migration of Labor," Annual Review of Economics, Annual Reviews, Annual Reviews, vol. 1(1), pages 179-208, 05.
  4. Wouterse, Fleur, 2012. "Migration and Rural Welfare: The Impact of Potential Policy Reforms in Europe," World Development, Elsevier, Elsevier, vol. 40(12), pages 2427-2439.
  5. Alessandra Venturini, 2008. "Circular Migration as an Employment Strategy for Mediterranean Countries," RSCAS Working Papers, European University Institute carim2008/39, European University Institute.
  6. Hanson, Gordon H., 2009. "The Governance of Migration Policy," MPRA Paper 19178, University Library of Munich, Germany.
  7. Jacques Poot & Anna Strutt, 2009. "International Trade Agreements and International Migration," Working Papers in Economics, University of Waikato, Department of Economics 09/06, University of Waikato, Department of Economics.
  8. repec:rsc:rsceui:2008/39 is not listed on IDEAS
  9. Slobodan Djajic & Michael S. Michael, 2009. "Temporary Migration Policies and Welfare of the Host and Source Countries: A Game-Theoretic Approach," CESifo Working Paper Series 2811, CESifo Group Munich.

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