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Self-Confirming Immigration Policy

  • Paolo E. Giordani
  • Michele Ruta

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.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2012/wp-cesifo-2012-03/cesifo1_wp3762.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3762.

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Date of creation: 2012
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Handle: RePEc:ces:ceswps:_3762
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  1. Drew Fudenberg & David K Levine, 2005. "Superstition and Rational Learning," Levine's Working Paper Archive 618897000000000731, David K. Levine.
  2. Giordani, Paolo E. & Rutaz, Michele, 2011. "Coordination failures in immigration policy," WTO Staff Working Papers ERSD-2011-02, World Trade Organization (WTO), Economic Research and Statistics Division.
  3. Giovanni Facchini & Anna Maria Mayda, 2006. "Individual Attitudes towards Immigrants: Welfare-State Determinants across Countries," CESifo Working Paper Series 1768, CESifo Group Munich.
  4. Timothy J. Hatton & Jeffrey G. Williamson, 2004. "International Migration in the Long-Run: Positive Selection, Negative Selection and Policy," Harvard Institute of Economic Research Working Papers 2038, Harvard - Institute of Economic Research.
  5. Giovanni Facchini & Anna Maria Mayda, 2008. "From Individual Attitudes towards Migrants to Migration Policy Outcomes. Theory and Evidence," Development Working Papers 251, Centro Studi Luca d\'Agliano, University of Milano.
  6. Jeffrey Grogger & Gordon H. Hanson, 2008. "Income Maximization and the Selection and Sorting of International Migrants," NBER Working Papers 13821, National Bureau of Economic Research, Inc.
  7. 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.
  8. de Melo, Jaime & Grether, Jean-Marie & Müller, Tobias, 2001. "The Political Economy of International Migration in a Ricardo-Viner Model," CEPR Discussion Papers 2714, C.E.P.R. Discussion Papers.
  9. Razin, Assaf & Sadka, Efraim & Suwankiri, Benjarong, 2011. "Migration and the Welfare State: Political-Economy Policy Formation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262016109, June.
  10. 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.
  11. Facchini, Giovanni & Willmann, Gerald, 2005. "The political economy of international factor mobility," Journal of International Economics, Elsevier, vol. 67(1), pages 201-219, September.
  12. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-53, September.
  13. Paolo E. Giordani & Michele Ruta, 2009. "Prejudice and Immigration," Working Papers CELEG 0904, Dipartimento di Economia e Finanza, LUISS Guido Carli.
  14. Kevin H. O'Rourke & Richard Sinnott, 2004. "The Determinants of Individual Attitudes Towards Immigration," Trinity Economics Papers 20042, Trinity College Dublin, Department of Economics.
  15. 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.
  16. Timothy J. Hatton & Jeffrey G. Williamson, 2008. "Global Migration and the World Economy: Two Centuries of Policy and Performance," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582775, June.
  17. Ortega, Francesc, 2005. "Immigration quotas and skill upgrading," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1841-1863, September.
  18. Alon Cohen & Assaf Razin, 2008. "The Skill Composition of Immigrants and the Generosity of the Welfare State: Free vs. Policy-Controlled Migration," NBER Working Papers 14459, National Bureau of Economic Research, Inc.
  19. Benhabib, Jess, 1996. "On the political economy of immigration," European Economic Review, Elsevier, vol. 40(9), pages 1737-1743, December.
  20. 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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