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Self-Confirming Immigration Policy

Author

Listed:
  • Paolo E. Giordani
  • Michele Ruta

Abstract

We study immigration policy in a small receiving economy under self-selection of migrants. We show that a non-discriminatory immigration policy choice affects and is affected by the migratory decisions of skilled and unskilled foreign workers. From this interaction multiple equilibria may arise, which are driven by the natives’ expectations on the welfare effects of immigration. In particular, pessimistic (optimistic) beliefs induce a country to impose higher (lower) barriers to immigration, which crowd out (crowd in) skilled migrants and thus confirm initial beliefs. This self-fulfilling mechanism sustains the endogenous formation of an anti or pro-immigration prejudice. We discuss how the adoption of a skill-selective policy affects this result.

Suggested Citation

  • Paolo E. Giordani & Michele Ruta, 2012. "Self-Confirming Immigration Policy," CESifo Working Paper Series 3762, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_3762
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    References listed on IDEAS

    as
    1. Giordani, Paolo E. & Ruta, Michele, 2013. "Coordination failures in immigration policy," Journal of International Economics, Elsevier, vol. 89(1), pages 55-67.
    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.
    3. Michèle V. K. Belot & Timothy J. Hatton, 2012. "Immigrant Selection in the OECD," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(4), pages 1105-1128, December.
    4. Giovanni Facchini & Anna Maria Mayda, 2008. "From individual attitudes towards migrants to migration policy outcomes: Theory and evidence," Economic Policy, CEPR;CES;MSH, vol. 23, pages 651-713, October.
    5. Paolo E Giordani & Michele Ruta, 2008. "Prejudice and Immigration," Levine's Working Paper Archive 122247000000002276, David K. Levine.
    6. David McKenzie & Hillel Rapoport, 2010. "Self-Selection Patterns in Mexico-U.S. Migration: The Role of Migration Networks," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 811-821, November.
    7. Drew Fudenberg & David K. Levine, 2006. "Superstition and Rational Learning," American Economic Review, American Economic Association, vol. 96(3), pages 630-651, June.
    8. 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.
    9. Ortega, Francesc, 2005. "Immigration quotas and skill upgrading," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1841-1863, September.
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    13. Giorgio Bellettini & Carlotta Berti Ceroni, 2007. "Immigration Policy, Self-selection, and the Quality of Immigrants," Review of International Economics, Wiley Blackwell, vol. 15(5), pages 869-877, November.
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    Cited by:

    1. Giordani, Paolo E. & Ruta, Michele, 2013. "Coordination failures in immigration policy," Journal of International Economics, Elsevier, vol. 89(1), pages 55-67.

    More about this item

    Keywords

    immigration policy; skilled/unskilled workers; small economy; multiple equilibria;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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