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Optimal Immigration Policy When the Public Good Is Rival

  • Stefano Bosi

    ()

    (THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise)

  • Eleni Iliopulos

    ()

    (CEPREMAP - Centre pour la recherche économique et ses applications - Centre pour la recherche économique et ses applications, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)

  • Hubert Jayet

    ()

    (EQUIPPE - ECONOMIE QUANTITATIVE, INTEGRATION, POLITIQUES PUBLIQUES ET ECONOMETRIE - Université Lille I - Sciences et technologies - Université Lille II - Droit et santé - Université Lille III - Sciences humaines et sociales - PRES Université Lille Nord de France)

In this model, we characterize optimal immigration and fiscal policies in presence of a rival public good and heterogeneous discounting. Surprisingly, even if the government is benevolent towards natives only, it is optimal to keep borders open. Indeed, in the long run, patient natives hold the whole stock of capital, while impatient immigrants work. Moreover, since capital intensity is stationary, capital per native, consumption and the public good increase with the number of (immigrant) workers. This positive effect offsets the disutility deriving from the congestion of the public good. Howevern when we account for the costs associated to cultural heterogeneity, we find that it is optimal to regulate immigration inflows. We also interpret the long-run sensitivity of the optimal policy mix with respect to the fundamentals.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00544332.

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Date of creation: Nov 2010
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Handle: RePEc:hal:cesptp:halshs-00544332
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00544332
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  1. LE VAN, Cuong & VAILAKIS, Yiannis, . "Existence of a competitive equilibrium in a one sector growth model with heterogeneous agents and irreversible investment," CORE Discussion Papers RP -1762, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Cuong Le Van & Manh-Hung Nguyen & Yiannis Vailakis, 2005. "Equilibrium dynamics in an aggregative model of capital accumulation with heterogeneous agents and elastic labor," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00197560, HAL.
  3. Kevin H. O'Rourke & Richard Sinnott, 2004. "The Determinants of Individual Attitudes Towards Immigration," Trinity Economics Papers 20042, Trinity College Dublin, Department of Economics.
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