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Sustainable migration policies

  • PICARD, Pierre M.


    (Département Economie, University of Luxembourg, L-1511 Luxembourg and Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium)

  • WORRALL, Tim


    (Economics, School of Social Sciences, University of Manchester, U.K.)

This paper considers whether countries might mutually agree a policy of open borders, allowing free movement of workers across countries. For the countries to agree, the short run costs must outweighed by the long term benefits that result from better labor market flexibility and income smoothing. We show that such policies are less likely to be adopted when workers are less risk averse workers and when countries trade more. More surprisingly, we find that some congestion costs can help. This reverses the conventional wisdom that congestion costs tend to inhibit free migration policies.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2011040.

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Date of creation: 01 Sep 2011
Date of revision:
Handle: RePEc:cor:louvco:2011040
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  17. Schiff, Maurice, 2006. "Substitution in Markusen's classic trade and factor movement complementarity models," Policy Research Working Paper Series 3974, The World Bank.
  18. Pierfederico Asdrubali & Bent E. Sørensen & Oved Yosha, 1996. "Channels of Interstate Risk Sharing: United States 1963–1990," The Quarterly Journal of Economics, Oxford University Press, vol. 111(4), pages 1081-1110.
  19. James W. Friedman, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Oxford University Press, vol. 38(1), pages 1-12.
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