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Strategic Immigration Policies and Welfare in Heterogeneous Countries

Author

Listed:
  • Masahisa Fujita

    (Department of Economics, Southern Methodist University and CORE, Catholic University of Louvain)

  • Shlomo Weber

    (Southern Methodist University)

Abstract

In this paper we consider a model with two industrialised countries and immigrants that come from “the rest of the world”. The countries are distinguished on the basis of three parameters: population size, bias towards immigrants, and production complementarity between native population and immigrants. We consider a non-cooperative game where each country makes a strategic choice of its immigration quotas. We first show that our game admits a unique pure strategy Nash equilibrium and then study the welfare implications of countries’ choices. It turns out that a county with a higher degree of production complementarity and a higher level of tolerance towards immigrants would allow a larger immigration quota and achieve a higher welfare level. Our results call for coordinated and harmonised immigration policies that may improve the welfare of both countries.

Suggested Citation

  • Masahisa Fujita & Shlomo Weber, 2004. "Strategic Immigration Policies and Welfare in Heterogeneous Countries," Working Papers 2004.2, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2004.2
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    References listed on IDEAS

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    3. Carole Juliette Maignan (ed.) & Gianmarco Ottaviano (ed.) & Dino Pinelli (ed.), 2003. "Economic Growth, Innovation, Cultural Diversity. What Are We All Talking About? A Critical Survey of the State-of-the-art," Working Papers 2003.12, Fondazione Eni Enrico Mattei.
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    Citations

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    Cited by:

    1. Marcus Berliant & Masahisa Fujita, 2008. "Knowledge Creation As A Square Dance On The Hilbert Cube," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1251-1295, November.
    2. Kemeny, Thomas, 2013. "Immigrant diversity and economic development in cities: a critical review," LSE Research Online Documents on Economics 58458, London School of Economics and Political Science, LSE Library.
    3. Annekatrin Niebuhr, 2010. "Migration and innovation: Does cultural diversity matter for regional R&D activity?," Papers in Regional Science, Wiley Blackwell, vol. 89(3), pages 563-585, August.
    4. Nathan, Max, 2013. "The Wider Economic Impacts of High-Skilled Migrants: A Survey of the Literature," IZA Discussion Papers 7653, Institute for the Study of Labor (IZA).
    5. Stephan Brunow & Luise Grünwald, 2014. "Exports, agglomeration and workforce diversity: An empirical assessment of German establishments," Norface Discussion Paper Series 2014008, Norface Research Programme on Migration, Department of Economics, University College London.
    6. Stephan Brunow & Valentina Nafts, 2013. "What types of firms tend to be more innovative: A study on Germany," Norface Discussion Paper Series 2013021, Norface Research Programme on Migration, Department of Economics, University College London.
    7. Max Nathan, 2011. "Ethnic Inventors, Diversity and Innovation in the UK: Evidence from Patents Microdata," SERC Discussion Papers 0092, Spatial Economics Research Centre, LSE.
    8. Max Nathan & Neil Lee, 2013. "Cultural Diversity, Innovation, and Entrepreneurship: Firm-level Evidence from London," Economic Geography, Clark University, vol. 89(4), pages 367-394, October.
    9. Marcus Berliant & Masahisa Fujita, 2009. "Dynamics of knowledge creation and transfer: The two person case," International Journal of Economic Theory, The International Society for Economic Theory, vol. 5(2), pages 155-179.
    10. Nathan, Max, 2013. "Top team demographics, innovation and business performance: findings from English firms and cities 2008-9," LSE Research Online Documents on Economics 59250, London School of Economics and Political Science, LSE Library.
    11. Abigail Cooke & Thomas Kemeny, 2016. "Immigrant Diversity and Complex Problem Solving," Working Papers 16-04, Center for Economic Studies, U.S. Census Bureau.

    More about this item

    Keywords

    Immigration quotas; Heterogeneity; Production complementarity; Welfare; Policy Harmonisation;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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