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Tradable Immigration Quotas

  • Jesus Fernandez-Huertas Moraga
  • Hillel Rapoport

International migration is maybe the single most effective way to alleviate global poverty. When a given host country allows more immigrants in, this creates costs and benefits for that particular country as well as a positive externality for individuals and governments who care about world poverty. This implies that the existing international migration regime is inefficient as it fails to internalize such externality. In addition, host countries quite often restrict immigration due to its apparently unbearable social and political costs, however these costs are never measured and made comparable across countries. In this paper we first discuss theoretically how tradable immigration quotas (TIQs) can reveal countries’ comparative advantage in hosting immigrants and, once coupled with a matching mechanism taking migrants’ preferences over destinations and countries preferences over migrants’ types into account, generate substantial welfare gains. We then discuss two potential applications: a market for the resettlement of international (e.g., climate change) refugees, and the creation of an OECD poverty-reduction visa program adapted from the US green card lottery.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4087.

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Date of creation: 2013
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Handle: RePEc:ces:ceswps:_4087
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