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Too Many Migrants, Too Few Services: A Model of Decision-making on Immigration and Integration with Cultural Distance

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  • Harrie A. A Verbon
  • Lex Meijdam

Abstract

In this paper we model the demand for immigrants as a trade-off native voters face between having services, produced by unskilled and non-assimilated immigrants, and experiencing disutility due to the immigrant workers having a culture different from the native culture. Immigrants decide whether to integrate into the native culture. If they don’t, they produce services. Assimilated immigrants take on skilled jobs. At the political level natives choose the number of immigrants that can be allowed, given some fixed price for services. We show that, at the assumed price, it is never optimal for natives to have equilibrium or unemployment in the service sector. Market forces then lead to higher service prices, implying that the initially allowed number of immigrants is too large.

Suggested Citation

  • Harrie A. A Verbon & Lex Meijdam, 2004. "Too Many Migrants, Too Few Services: A Model of Decision-making on Immigration and Integration with Cultural Distance," CESifo Working Paper Series 1268, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_1268
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    References listed on IDEAS

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    1. Anna Maria Mayda, 2006. "Who Is Against Immigration? A Cross-Country Investigation of Individual Attitudes toward Immigrants," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 510-530, August.
    2. 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).
    3. Mansoorian, Arman & Myers, Gordon M., 1993. "Attachment to home and efficient purchases of population in a fiscal externality economy," Journal of Public Economics, Elsevier, vol. 52(1), pages 117-132, August.
    4. Epstein, Gil S & Gang, Ira, 2004. "Ethnic Networks and International Trade," CEPR Discussion Papers 4616, C.E.P.R. Discussion Papers.
    5. Dickens, William T & Lang, Kevin, 1985. "A Test of Dual Labor Market Theory," American Economic Review, American Economic Association, vol. 75(4), pages 792-805, September.
    6. Haupt, Alexander & Peters, Wolfgang, 1998. "Public Pensions and Voting on Immigration," Public Choice, Springer, vol. 95(3-4), pages 403-413, June.
    7. Benhabib, Jess, 1996. "On the political economy of immigration," European Economic Review, Elsevier, vol. 40(9), pages 1737-1743, December.
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    Cited by:

    1. Junko Doi & Laixun Zhao, 2012. "Immigration Conflicts," Discussion Paper Series DP2012-29, Research Institute for Economics & Business Administration, Kobe University, revised Dec 2012.
    2. Franco Mariuzzo & Patrick Paul Walsh & Ciara Whelan, 2004. "EU Merger Control in Differentiated Product Industries," CESifo Working Paper Series 1312, CESifo Group Munich.
    3. Beckhusen, Julia & Florax, Raymond J.G.M. & de Graaff, Thomas & Poot, Jacques & Waldorf, Brigitte, 2012. "Living and Working in Ethnic Enclaves: Language Proficiency of Immigrants in U.S. Metropolitan Areas," IZA Discussion Papers 6363, Institute for the Study of Labor (IZA).
    4. Natasha T. Duncan & Brigitte S. Waldorf, 2008. "Immigrant Assimilation:Do Neighborhoods Matter?," Working Papers 08-13, Purdue University, College of Agriculture, Department of Agricultural Economics.

    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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