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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
Handle: RePEc:ces:ceswps:_3762
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  1. 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.
  2. George J. Borjas, 1987. "Self-Selection and the Earnings of Immigrants," NBER Working Papers 2248, National Bureau of Economic Research, Inc.
  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. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
  6. 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.
  7. Facchini, Giovanni & Mayda, Anna Maria, 2008. "From Individual Attitudes towards Migrants to Migration Policy Outcomes: Theory and Evidence," IZA Discussion Papers 3512, Institute for the Study of Labor (IZA).
  8. Ortega, Francesc, 2005. "Immigration quotas and skill upgrading," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1841-1863, September.
  9. Paolo Giordani & Michele Ruta, 2011. "Coordination Failures in Immigration Policy," Working Papers LuissLab 1190, Dipartimento di Economia e Finanza, LUISS Guido Carli.
  10. 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.
  11. Dolmas, James & Huffman, Gregory W., 1998. "On the political economy of immigration and income redistribution," Working Papers 9804, Federal Reserve Bank of Dallas.
  12. Drew Fudenberg & David K. Levine, 2006. "Superstition and Rational Learning," Harvard Institute of Economic Research Working Papers 2114, Harvard - Institute of Economic Research.
  13. Jaime MELO DE & Jean Marie GRETHER & Jean Claude MULLER, 2000. "The Political Economy of International Migration in a Ricardo-Viner Model," Working Papers 200021, CERDI.
  14. 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, March.
  15. Paolo E Giordani & Michele Ruta, 2008. "Prejudice and Immigration," Levine's Working Paper Archive 122247000000002276, David K. Levine.
  16. O'Rourke, Kevin H. & Sinnott, Richard, 2006. "The determinants of individual attitudes towards immigration," European Journal of Political Economy, Elsevier, vol. 22(4), pages 838-861, December.
  17. Benhabib, Jess, 1996. "On the political economy of immigration," European Economic Review, Elsevier, vol. 40(9), pages 1737-1743, December.
  18. 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.
  19. 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, March.
  20. 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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