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Is Selling Immigration Rights Politically Sustainable ?

  • Bertrand CRETTEZ

    (Université Panthéon-Assas, Paris II)

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    This paper relies on Benhabib (1996)’ s immigration model to analyze the political sustainability of selling immigration permits, an idea proposed by Gary Becker. To simplify the analysis, we focus on the effects of immigration flows on input prices. We find that immigration quotas almost always generate the highest capital-labor ratio (and thus the highest wage rate). We also provide an example in which immigration permits generate the lowest value of the capital-labor ratio when permits sales are wasted. Under this last assumption, we show that if the wealth of the median voter is low enough, immigration quotas will be chosen over immigration permits. If the median voter’s wealth is high, then the issue of majority voting will be the system which delivers the lowest capital-labor ratio.

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    File URL: http://sites.uclouvain.be/econ/DP/REL/2011042.pdf
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    Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (REL - Recherches Economiques de Louvain) with number 2011042.

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    Length: 23
    Date of creation: 01 Dec 2011
    Date of revision:
    Handle: RePEc:ctl:louvre:2011042
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    1. Giorgio Bellettini & Carlotta Berti Ceroni, 2008. "Can Unions Hurt Workers? A Positive Analysis Of Immigration Policy," Economics and Politics, Wiley Blackwell, vol. 20(1), pages 106-124, 03.
    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. DE LA CROIX, David & GOSSERIES, Axel, 2006. "Population policy through tradable procreation entitlements," CORE Discussion Papers 2006081, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Sanoussi Bilal & Jean-Marie Grether & Jaime de Melo, 2015. "Attitudes Towards Immigration: A Trade Theoretic Approach," World Scientific Book Chapters, in: Developing Countries in the World Economy, chapter 18, pages 439-453 World Scientific Publishing Co. Pte. Ltd..
    5. Francesco Magris & Giuseppe Russo, 2004. "Voting on mass immigration restriction," DELTA Working Papers 2004-27, DELTA (Ecole normale supérieure).
    6. David Card, 2004. "Is the New Immigration Really So Bad?," CReAM Discussion Paper Series 0402, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    7. Giora Dula & Nava Kahana & Tikva Lecker, 2006. "How to partly bounce back the struggle against illegal immigration to the source countries," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(2), pages 315-325, June.
    8. Xavier Gabaix, 2009. "Power Laws in Economics and Finance," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 255-294, 05.
    9. David de la Croix & Axel Gosseries, 2007. "Procreation, Migration and Tradable Quotas," Chapters, in: Population Aging, Intergenerational Transfers and the Macroeconomy, chapter 9 Edward Elgar Publishing.
    10. Anna Maria Mayda, 2004. "Who is Against Immigration? A Cross-Country Investigation of Individual Attitudes toward Immigrants," Development Working Papers 187, Centro Studi Luca d'Agliano, University of Milano.
    11. Wolfgang Ochel, 2001. "Selective Immigration Policies: Point System versus Auction Model," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 2(2), pages 48-52, 03.
    12. Benhabib, Jess, 1996. "On the political economy of immigration," European Economic Review, Elsevier, vol. 40(9), pages 1737-1743, December.
    13. Gil Epstein & Shmuel Nitzan, 2006. "The struggle over migration policy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(4), pages 703-723, October.
    14. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1335-1374.
    15. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
    16. J. Amegashie, 2004. "A political economy model of immigration quotas," Economics of Governance, Springer, vol. 5(3), pages 255-267, November.
    17. 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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