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Immigration from a terror-prone nation: destination nation’s optimal immigration and counterterrorism policies

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Abstract

The paper presents a two-country model in which a destination country chooses its immigration quota and proactive counterterrorism actions in response to immigration from a terror-plagued source country. After the destination country fixes its two policies, immigrants decide between supplying labor or conducting terrorist attacks, which helps determine equilibrium labor supply and wages. The analysis accounts for the marginal disutility of lost rights/freedoms stemming from stricter counterterror measures as well the inherent radicalization of migrants. Comparative statics involve changes to those two parameters. For example, an enhanced importance attached to lost rights is shown to limit immigration quotas and counterterrorism actions. In contrast, increased source-country radicalization reduces immigration quotas but has an ambiguous effect on optimal proactive measures. Extensions involving defensive policies and destination-country citizens radicalization are considered.

Suggested Citation

  • Subhayu Bandyopadhyay & Khusrav Gaibulloev & Todd Sandler, 2023. "Immigration from a terror-prone nation: destination nation’s optimal immigration and counterterrorism policies," Working Papers 2023-014, Federal Reserve Bank of St. Louis.
    • Handle: RePEc:fip:fedlwp:96348
    DOI: 10.20955/wp.2023.014
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    References listed on IDEAS

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    1. Marc Helbling & Daniel Meierrieks, 2020. "Transnational terrorism and restrictive immigration policies," Journal of Peace Research, Peace Research Institute Oslo, vol. 57(4), pages 564-580, July.
    2. Ethier, Wilfred J, 1986. "Illegal Immigration: The Host-Country Problem," American Economic Review, American Economic Association, vol. 76(1), pages 56-71, March.
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    5. Khusrav Gaibulloev & Todd Sandler, 2019. "What We Have Learned about Terrorism since 9/11," Journal of Economic Literature, American Economic Association, vol. 57(2), pages 275-328, June.
    6. Helbling, Marc & Meierrieks, Daniel, 2022. "Terrorism and Migration: An Overview," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 60(2), pages 977-996.
    7. Daniel G. Arce & Todd Sandler, 2010. "Terrorist Spectaculars: Backlash Attacks and the Focus of Intelligence," Journal of Conflict Resolution, Peace Science Society (International), vol. 54(2), pages 354-373, April.
    8. Walter Enders & Todd Sandler & Khusrav Gaibulloev, 2011. "Domestic Versus Transnational Terrorism: Data, Decomposition, and Dynamics," Journal of Peace Research, Peace Research Institute Oslo, vol. 48(3), pages 319-337, May.
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    More about this item

    Keywords

    immigration; terrorism; counterterrorism; rights; freedoms; radicalization; labor market equilibrium;
    All these keywords.

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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