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

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  • Schiff, Maurice

    ()
    (World Bank)

Abstract

Immigration continues to be on the forefront of the policy debate on both sides of the Atlantic. A number of reforms of permanent and guest-worker (GW) immigration programs are being considered, and the temporary movement of service providers under Mode IV (GATS) is being negotiated at the Doha Round of the WTO. This paper contributes to the debate by examining these programs in a model where the host country government maximizes its objective function with respect to three policy instruments: the share of migrants’ deferred income payment, the value of the bond employers must post and forfeit if GWs overstay, and the size of the program. Circular migration and illegal GWs’ status regularization are considered. The paper shows that i) the optimal value of the bond is zero, ii) Mode IV is preferable to GW migration; iii) the optimal policy package consists of Mode IV and permanent migration, and iv) incorporating circular migration improves the policy package. Additional policy implications are also provided.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3083.

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Length: 31 pages
Date of creation: Sep 2007
Date of revision:
Handle: RePEc:iza:izadps:dp3083

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Keywords: permanent; Mode IV; guest-worker; immigration; overstaying;

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References

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  1. 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.
  2. Constant, Amelie & Zimmermann, Klaus F, 2007. "Circular Migration: Counts of Exits and Years Away from the Host Country," CEPR Discussion Papers 6438, C.E.P.R. Discussion Papers.
  3. Avi Weiss & Arye L. Hillman & Gil S. Epstein, 1999. "Creating illegal immigrants," Journal of Population Economics, Springer, vol. 12(1), pages 3-21.
  4. Grossman, Gene & Helpman, Elhanan, 1993. "Protection for Sale," CEPR Discussion Papers 827, C.E.P.R. Discussion Papers.
  5. Ruhs, Martin & Chang, Ha-Joon, 2004. "The Ethics of Labor Immigration Policy," International Organization, Cambridge University Press, vol. 58(01), pages 69-102, February.
  6. Amin, Mohammad & Mattoo, Aaditya, 2005. "Does temporary migration have to be permanent?," Policy Research Working Paper Series 3582, The World Bank.
  7. 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.
  8. Dustmann, Christian, 1997. "Return migration, uncertainty and precautionary savings," Journal of Development Economics, Elsevier, vol. 52(2), pages 295-316, April.
  9. Aaditya Mattoo & Antonia Carzaniga, 2003. "Moving People to Deliver Services," World Bank Publications, The World Bank, number 15088.
  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, vol. 12(1), pages 91-116.
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Citations

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Cited by:
  1. Docquier, Frédéric & Schiff, Maurice, 2008. "Measuring Skilled Emigration Rates: The Case of Small States," IZA Discussion Papers 3388, Institute for the Study of Labor (IZA).
  2. 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.
  3. Wouterse, Fleur, 2012. "Migration and Rural Welfare: The Impact of Potential Policy Reforms in Europe," World Development, Elsevier, vol. 40(12), pages 2427-2439.
  4. Gordon H. Hanson, 2009. "The Economic Consequences of the International Migration of Labor," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 179-208, 05.
  5. Jacques Poot & Anna Strutt, 2009. "International Trade Agreements and International Migration," Working Papers in Economics 09/06, University of Waikato, Department of Economics.
  6. Gordon Hanson, 2010. "The Governance of Migration Policy," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 11(2), pages 185-207.
  7. Alessandra Venturini, 2008. "Circular Migration as an Employment Strategy for Mediterranean Countries," RSCAS Working Papers carim2008/39, European University Institute.
  8. repec:rsc:rsceui:2008/39 is not listed on IDEAS
  9. Jesus Fernandez-Huertas Moraga, 2008. "A General Model of Bilateral Migration Agreements," Working Papers 360, Barcelona Graduate School of Economics.

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