Immigration as a Commitment Device
AbstractThis paper shows that the toleration of immigrants who are on average less skilled than natives can be part of a support-maximizing government policy, despite a general political bias in favor of the poor. We make this point in a simple model with redistributive unemployment insurance. Once wage contracts are binding, the government has an incentive to increase the unemployment benefit, leading to excessive unemployment. Affecting the political balance within the constituency, immigrants can serve as a commitment device against this time-inconsistency. We show that this possibility can be greatly promoted by restrictions on political naturalization.
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Bibliographic InfoPaper provided by Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre in its series Discussion Papers with number 614.
Date of creation: 2004
Date of revision:
Other versions of this item:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
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