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Workers Without Borders? Culture, Migration and the Political Limits to Globalization

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  • Sanjay Jain

    ()
    (University of Virginia)

  • Sumon Majumdar

    ()
    (Queen's University)

  • Sharun Mukand

    ()
    (Tufts University)

Abstract

This paper examines the role of cultural factors in driving the politics and shape of migration policy. We show that there exists a broad political failure that results in inefficiently high barriers restricting the import of temporary foreign workers and also admitting an inefficiently large number of permanent migrants, but not enough to fill any labor shortage in the economy. We show that countries that are poor at cultural assimilation are better positioned to take advantage of short-term foreign worker programs than more culturally diverse and tolerant countries. A striking implication is that relaxing restrictions on the mobility of migrant workers across employers has the potential to raise host country welfare even though it increases migrant wages and lowers individual firm's profits. We also demonstrate the existence of multiple equilibria: some countries have mostly temporary migration programs and see a low degree of cultural assimilation by the migrants, while other countries rely more on permanent migrants and see much more assimilation.

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File URL: http://qed.econ.queensu.ca/working_papers/papers/qed_wp_1196.pdf
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Bibliographic Info

Paper provided by Queen's University, Department of Economics in its series Working Papers with number 1196.

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Length: 36 pages
Date of creation: Dec 2008
Date of revision:
Handle: RePEc:qed:wpaper:1196

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Keywords: international migration; political economy; cultural heterogeneity; temporary workers;

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  1. Dustmann, Christian, 1999. " Temporary Migration, Human Capital, and Language Fluency of Migrants," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(2), pages 297-314, June.
  2. David Card & Christian Dustmann & Ian Preston, 2012. "Immigration, Wages, And Compositional Amenities," Journal of the European Economic Association, European Economic Association, vol. 10(1), pages 78-119, 02.
  3. Stephen Coate & Stephen Morris, . "Policy Persistence," Penn CARESS Working Papers 8a66677895e9fcb3f6d813c0c, Penn Economics Department.
  4. Walmsley, Terri Louise & Winters, L. Alan, 2003. "Relaxing the Restrictions on the Temporary Movements of Natural Persons: A Simulation Analysis," CEPR Discussion Papers 3719, C.E.P.R. Discussion Papers.
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  14. Anna Maria Mayda & Giovanni Facchini, 2006. "Individual Attitudes towards Immigrants: Welfare-State Determinants Across Countries," The Institute for International Integration Studies Discussion Paper Series iiisdp143, IIIS.
  15. Ottaviano, Gianmarco Ireo Paolo & Peri, Giovanni, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," CEPR Discussion Papers 6916, C.E.P.R. Discussion Papers.
  16. Alesina, Alberto & La Ferrara, Eliana, 2005. "Ethnic Diversity and Economic Performance," Scholarly Articles 4553005, Harvard University Department of Economics.
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  18. 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.
  19. Facchini, Giovanni & Willmann, Gerald, 2005. "The political economy of international factor mobility," Journal of International Economics, Elsevier, vol. 67(1), pages 201-219, September.
  20. Klein, Paul & Ventura, Gustavo, 2009. "Productivity differences and the dynamic effects of labor movements," Journal of Monetary Economics, Elsevier, vol. 56(8), pages 1059-1073, November.
  21. Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer.
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  23. Bauer, Thomas K. & Lofstrom, Magnus & Zimmermann, Klaus F., 2000. "Immigration Policy, Assimilation of Immigrants and Natives' Sentiments towards Immigrants: Evidence from 12 OECD-Countries," IZA Discussion Papers 187, Institute for the Study of Labor (IZA).
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