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

Listed author(s):
  • Sanjay Jain
  • Sumon Majumdar
  • Sharun Mukand

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://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2010/wp-cesifo-2010-02/cesifo1_wp2954.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2954.

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Date of creation: 2010
Handle: RePEc:ces:ceswps:_2954
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  1. Richard B. Freeman, 2006. "People Flows in Globalization," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 145-170, Spring.
  2. Facchini, Giovanni & Willmann, Gerald, 2005. "The political economy of international factor mobility," Journal of International Economics, Elsevier, vol. 67(1), pages 201-219, September.
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  5. George J. Borjas, 1995. "The Economic Benefits from Immigration," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 3-22, Spring.
  6. 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).
  7. 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.
  8. Ottaviano, Gianmarco & Peri, Giovanni, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," CEPR Discussion Papers 6916, C.E.P.R. Discussion Papers.
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  10. Besley, Timothy & Coate, Stephen, 1998. "Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 88(1), pages 139-156, March.
  11. Giovanni Facchini & Anna Maria Mayda, 2006. "Individual Attitudes towards Immigrants: Welfare-State Determinants Across Countries," Working Papers gueconwpa~06-06-02, Georgetown University, Department of Economics.
  12. Razin, Assaf & Sadka, Efraim & Swagel, Phillip, 2002. "Tax burden and migration: a political economy theory and evidence," Journal of Public Economics, Elsevier, vol. 85(2), pages 167-190, August.
  13. Alberto Alesina & Eliana La Ferrara, 2003. "Ethnic Diversity and Economic Performance," Harvard Institute of Economic Research Working Papers 2028, Harvard - Institute of Economic Research.
  14. Stephen Morris & Stephen Coate, 1999. "Policy Persistence," American Economic Review, American Economic Association, vol. 89(5), pages 1327-1336, December.
  15. Geoffrey Carliner, 1995. "The Language Ability of U.S. Immigrants: Assimilation and Cohort Effects," NBER Working Papers 5222, National Bureau of Economic Research, Inc.
  16. 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.
  17. Edward P. Lazear, 1999. "Culture and Language," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 95-126, December.
  18. 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.
  19. István Kónya, 2007. "Optimal Immigration and Cultural Assimilation," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 367-391.
  20. Walmsley, Terrie L. & Winters, L. Alan, 2005. "Relaxing the Restrictions on the Temporary Movement of Natural Persons: A Simulation Analysis," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 20, pages 688-726.
  21. Jim Dolmas & Gregory W. Huffman, 2004. "On The Political Economy Of Immigration And Income Redistribution," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(4), pages 1129-1168, November.
  22. Elhanan Helpman & Oleg Itskhoki & Stephen Redding, 2008. "Wages, Unemployment and Inequality with Heterogeneous Firms and Workers," NBER Working Papers 14122, National Bureau of Economic Research, Inc.
  23. Williamson, Jeffrey G., 1996. "Globalization, Convergence, and History," The Journal of Economic History, Cambridge University Press, vol. 56(02), pages 277-306, June.
  24. Hanson, Gordon H., 2005. "Why Does Immigration Divide America? Public Finance and Political Opposition to Open Borders," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4000, 03.
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