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Immigration, Citizenship, and the Size of Government

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  • Ortega, Francesc

    ()
    (Queens College, CUNY)

Abstract

This paper analyzes the political sustainability of the welfare state in an environment where immigration is the main demographic force and where governments are able to influence the size and skill composition of immigration flows. Specifically, I present a dynamic political-economy model where both income redistribution and immigration policy are chosen by majority vote. Voters take into account their children's prospects of economic mobility and the future political consequences of today's policies. Over time, the skill distribution evolves due to intergenerational skill upgrading and immigration. I consider three immigration and citizenship regimes. In the first, immigrants stay permanently in the country and citizenship is obtained by birthplace (jus soli). In the second regime immigration is also permanent but citizenship is passed only by bloodline (jus sanguinis). In the third regime immigrants are only admitted temporarily and cannot vote. Our main finding is that under permanent migration and jus soli there exist equilibria where income redistribution is sustained indefinitely, despite constant skill upgrading in the population. However, this is not the case in the other two regimes. The crucial insight is that unskilled voters trade off the lower wages from larger unskilled immigration with the increased political support for redistributive transfers provided by the children of the current immigrants. In contrast, in the regimes where immigrants and their children do not gain the right to vote, unskilled voters oppose any unskilled immigration and political support for income transfers vanishes. We argue that these mechanisms have important implications for the ongoing debates over comprehensive immigration reform in the US and elsewhere.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4528.

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Length: 36 pages
Date of creation: Oct 2009
Date of revision:
Publication status: published in: B.E. Journal of Economic Analysis and Policy: Contributions to Economic Analysis and Policy, 2010, 10 (1), Article 26
Handle: RePEc:iza:izadps:dp4528

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Keywords: redistributive policies; citizenship; immigration; political economy;

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Cited by:
  1. PICARD, Pierre M. & WORRALL, Tim, 2011. "Sustainable migration policies," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2011040, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Lena Calahorrano, 2011. "Population Aging and Individual Attitudes toward Immigration: Disentangling Age, Cohort and Time Effects," SOEPpapers on Multidisciplinary Panel Data Research 389, DIW Berlin, The German Socio-Economic Panel (SOEP).
  3. Llavador, Humberto & Solano-García, Angel, 2011. "Immigration policy with partisan parties," Journal of Public Economics, Elsevier, Elsevier, vol. 95(1-2), pages 134-142, February.
  4. Lena Calahorrano & Philipp an de Meulen, 2011. "Demographics and Factor Flows – A Political Economy Approach," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0299, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  5. Ortega, Francesc & Peri, Giovanni, 2012. "The Role of Income and Immigration Policies in Attracting International Migrants," IZA Discussion Papers 6655, Institute for the Study of Labor (IZA).
  6. Ortega, Francesc & Polavieja, Javier G., 2009. "Labor-Market Exposure as a Determinant of Attitudes toward Immigration," IZA Discussion Papers 4519, Institute for the Study of Labor (IZA).
  7. Ortega, Francesc & Peri, Giovanni, 2014. "Openness and income: The roles of trade and migration," Journal of International Economics, Elsevier, Elsevier, vol. 92(2), pages 231-251.
  8. Ortega, Francesc & Peri, Giovanni, 2009. "The Causes and Effects of International Labor Mobility: Evidence from OECD Countries 1980-2005," MPRA Paper 19183, University Library of Munich, Germany.
  9. Mario Izquierdo & Juan F. Jimeno & Juan A. Rojas, 2007. "On the aggregate effects of immigration in Spain," Banco de Espa�a Working Papers, Banco de Espa�a 0714, Banco de Espa�a.
  10. Armenter, Roc & Ortega, Francesc, 2011. "Credible redistribution policy and skilled migration," European Economic Review, Elsevier, Elsevier, vol. 55(2), pages 228-245, February.
  11. González, Libertad & Ortega, Francesc, 2011. "How do very open economies adjust to large immigration flows? Evidence from Spanish regions," Labour Economics, Elsevier, Elsevier, vol. 18(1), pages 57-70, January.

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