A political economy model of immigration quotas

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A political economy model of immigration quotas

Author Info

J. Atsu Amegashie (Department of Economics, University of Guelph)

Abstract

The paper examines a model in which the number of immigrants allowed into a country is the outcome of a costly political lobbying process between a firm and a union. The union and the firm bargain over the wage of natives after the number of immigrants that will be permitted is known. I consider two contest success functions: one in which the lobbyist with the higher effort is not necessarily the winner and another in which the lobbyist with the higher effort wins with certainty (i.e., the all-pay auction). Comparative statics results are derived to show how the reservation wage of immigrants, the size of the union, the sensitivity of the legislature to lobbying, the reservation of wage of natives, the price of the firm's product and the firm's bargaining power affect immigration quotas and the post-immigration wage of natives. I also discuss some limitations of my results.

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Paper provided by Department of Economics, Simon Fraser University in its series Discussion Papers with number dp00-19.

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Length: 33 pages
Date of creation: 2000
Date of revision: 19 Sep 2000
Handle: RePEc:sfu:sfudps:dp00-19

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Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers

References listed on IDEAS
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Myers, Gordon M. & Papageorgiou, Yorgos Y., 2000. "Immigration control and the welfare state," Journal of Public Economics, Elsevier, vol. 75(2), pages 183-207, February. [Downloadable!] (restricted)
Other versions:
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Amegashie, J Atsu, 2000. " How Unpleasant a Result?: A Reply to Derek J. Clark," Public Choice, Springer, vol. 102(3-4), pages 369-72, March. [Downloadable!] (restricted)
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Other versions:
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- Gary S. Becker, 1991. "A Note on Restaurant Pricing and Other Examples of Social Influences on Price," University of Chicago - George G. Stigler Center for Study of Economy and State 67, Chicago - Center for Study of Economy and State.
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Other versions:
- Yeon-Koo Che & Ian Gale, 1998. "Caps on Political Lobbying," Microeconomics 9809003, EconWPA. [Downloadable!]
Clark, D.J. & Riis, C., 1996. "On the Win Probability in Rent-Seeking Gemes," Memorandum 05/1996, Oslo University, Department of Economics.
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Other versions:
- Baye, M.R. & Kovenock, D. & De Vries, C.G., 1991. "Rigging The Lobbying Process: An Application Of The All- Pay Auction," Purdue University Economics Working Papers 1002, Purdue University, Department of Economics.
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Other versions:
- Alan G. Green & David A. Green, 1999. "The Economic Goals of Canada's Immigration Policy, Past and Present," Canadian Public Policy, University of Toronto Press, vol. 25(4), pages 425-451, December. [Downloadable!] (restricted)
Amegashie, J Atsu, 1999. " The Number of Rent-Seekers and Aggregate Rent-Seeking Expenditures: An Unpleasant Result," Public Choice, Springer, vol. 99(1-2), pages 57-62, April. [Downloadable!] (restricted)
Amegashie, J Atsu, 1999. " The Design of Rent-Seeking Competitions: Committees, Preliminary and Final Contests," Public Choice, Springer, vol. 99(1-2), pages 63-76, April. [Downloadable!] (restricted)
Ellingsen, Tore, 1991. "Strategic Buyers and the Social Cost of Monopoly," American Economic Review, American Economic Association, vol. 81(3), pages 648-57, June. [Downloadable!] (restricted)
Other versions:
- Ellingsen, T., 1990. "Strategic Buyers and the Social Cost of Monopoly," Papers 05-90, Norwegian School of Economics and Business Administration-.
Che, Yeon-Koo & Gale, Ian, 1997. " Rent Dissipation When Rent Seekers Are Budget Constrained," Public Choice, Springer, vol. 92(1-2), pages 109-26, July. [Downloadable!] (restricted)

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