IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp2871.html
   My bibliography  Save this paper

Optimal Immigration Policy: Permanent, Guest-Worker, or Mode IV?

Author

Listed:
  • Schiff, Maurice

    (World Bank)

Abstract

Host countries have implemented permanent and guest-worker (GW) immigration programs in recent decades, while the temporary movement of service providers under Mode IV of the GATS is one of the issues being negotiated at the Doha Round of the WTO. Though decisions on what programs to adopt have acquired increased urgency, the task has been complicated by host countries’ concern with migrants’ massive overstaying in past GW programs. This paper contributes to the debate by examining these migration regimes in a model in which the host country maximizes an objective function with respect to i) the size of the migration program, and – in the case of temporary migration – ii) the value of a bond employers must buy and iii) the share of migrants’ income whose payment is deferred. The maximization also takes into account the impact of the policy on source country cooperation on illegal immigration, migrants’ incentives and their preference for overstaying. The model solves for the policy measures, the overstaying probability, and the level of illegal migration. The paper concludes that the optimal policy is a combination of Mode IV-type and permanent migration.

Suggested Citation

  • Schiff, Maurice, 2007. "Optimal Immigration Policy: Permanent, Guest-Worker, or Mode IV?," IZA Discussion Papers 2871, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2871
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp2871.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Amin, Mohammad & Mattoo, Aaditya, 2005. "Does temporary migration have to be permanent?," Policy Research Working Paper Series 3582, The World Bank.
    2. Francisco L. Rivera-Batiz, 1999. "Undocumented workers in the labor market: An analysis of the earnings of legal and illegal Mexican immigrants in the United States," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(1), pages 91-116.
    3. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    4. Jean-Marie Grether & Jaime de Melo & Tobias Müller, 2015. "The Political Economy of International Migration in a Ricardo–Viner Model," World Scientific Book Chapters, in: Developing Countries in the World Economy, chapter 17, pages 411-437, World Scientific Publishing Co. Pte. Ltd..
    5. Zimmermann, Klaus F. & Constant, Amelie, 2007. "Circular Migration: Counts of Exits and Years Away from the Host Country," CEPR Discussion Papers 6438, C.E.P.R. Discussion Papers.
    6. Avi Weiss & Arye L. Hillman & Gil S. Epstein, 1999. "Creating illegal immigrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(1), pages 3-21.
    7. Dustmann, Christian, 1997. "Return migration, uncertainty and precautionary savings," Journal of Development Economics, Elsevier, vol. 52(2), pages 295-316, April.
    8. Aaditya Mattoo & Antonia Carzaniga, 2003. "Moving People to Deliver Services," World Bank Publications - Books, The World Bank Group, number 15088.
    9. Philip Martin, 2003. "Managing International Labor Migration in the 21st Century," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 1(1), pages 9-18.
    10. Schiff, Maurice, 2002. "Love thy neighbor: trade, migration, and social capital," European Journal of Political Economy, Elsevier, vol. 18(1), pages 87-107, March.
    11. Holzmann, Robert & Munz, Rainer, 2004. "Challenges and opportunities of international migration for the EU, its member states, neighboring countries, and regions : a Policy Note," Social Protection Discussion Papers and Notes 30160, The World Bank.
    12. Ruhs, Martin & Chang, Ha-Joon, 2004. "The Ethics of Labor Immigration Policy," International Organization, Cambridge University Press, vol. 58(1), pages 69-102, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gordon H. Hanson, 2009. "The Economic Consequences of the International Migration of Labor," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 179-208, May.
    2. Steffen Reinhold & Kevin Thom, 2013. "Migration Experience and Earnings in the Mexican Labor Market," Journal of Human Resources, University of Wisconsin Press, vol. 48(3), pages 768-820.
    3. Slobodan Djajić & Michael S. Michael, 2013. "Guest worker programs: A theoretical analysis of welfare of the host and source countries," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(3), pages 454-475, April.
    4. Gordon Hanson, 2010. "The Governance of Migration Policy," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 11(2), pages 185-207.
    5. repec:rsc:rsceui:2008/39 is not listed on IDEAS
    6. Jesus Fernandez-Huertas Moraga, 2008. "A General Model of Bilateral Migration Agreements," Working Papers 360, Barcelona School of Economics.
    7. Docquier, Frédéric & Schiff, Maurice, 2008. "Measuring Skilled Emigration Rates: The Case of Small States," IZA Discussion Papers 3388, Institute of Labor Economics (IZA).
    8. Slobodan Djajić & Alexandra Vinogradova, 2015. "Overstaying Guest Workers and the Incentives for Return," CESifo Economic Studies, CESifo Group, vol. 61(3-4), pages 764-796.
    9. Wouterse, Fleur, 2012. "Migration and Rural Welfare: The Impact of Potential Policy Reforms in Europe," World Development, Elsevier, vol. 40(12), pages 2427-2439.
    10. Jacques Poot & Anna Strutt, 2010. "International Trade Agreements and International Migration," The World Economy, Wiley Blackwell, vol. 33(12), pages 1923-1954, December.
    11. Alessandra Venturini, 2008. "Circular Migration as an Employment Strategy for Mediterranean Countries," RSCAS Working Papers carim2008/39, European University Institute.
    12. Djajić, Slobodan & Mesnard, Alice, 2015. "Guest workers in the underground economy," Labour Economics, Elsevier, vol. 35(C), pages 53-62.
    13. Slobodan Djajic & Michael S. Michael, 2009. "Temporary Migration Policies and Welfare of the Host and Source Countries: A Game-Theoretic Approach," CESifo Working Paper Series 2811, CESifo.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Schiff, Maurice, 2004. "When Migrants Overstay Their Legal Welcome: A Proposed Solution to the Guest-Worker Program," IZA Discussion Papers 1401, Institute of Labor Economics (IZA).
    2. Gordon H. Hanson, 2006. "Illegal Migration from Mexico to the United States," Journal of Economic Literature, American Economic Association, vol. 44(4), pages 869-924, December.
    3. Emmanuelle Auriol & Alice Mesnard, 2016. "Sale of Visas: a Smuggler's Final Song?," Economica, London School of Economics and Political Science, vol. 83(332), pages 646-678, October.
    4. Lee, Sang-Hyop & Sukrakarn, Nopparat & Choi, Jin-Young, 2011. "Repeat migration and remittances: Evidence from Thai migrant workers," Journal of Asian Economics, Elsevier, vol. 22(2), pages 142-151, April.
    5. Arye L. Hillman & Ngo Long, 2022. "Immigrants as future voters," Public Choice, Springer, vol. 190(1), pages 149-174, January.
    6. Gil S. Epstein & Odelia Heizler (Cohen), 2008. "Illegal migration, enforcement, and minimum wage," Research in Labor Economics, in: Work, Earnings and Other Aspects of the Employment Relation, pages 197-224, Emerald Group Publishing Limited.
    7. Vadean, Florin & Piracha, Matloob, 2009. "Circular Migration or Permanent Return: What Determines Different Forms of Migration?," IZA Discussion Papers 4287, Institute of Labor Economics (IZA).
    8. Gordon Hanson, 2010. "The Governance of Migration Policy," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 11(2), pages 185-207.
    9. Giuseppe Russo, 2011. "Voting over selective immigration policies with immigration aversion," Economics of Governance, Springer, vol. 12(4), pages 325-351, December.
    10. Francesco MAGRIS & Giuseppe RUSSO, 2005. "Voting on Mass Immigration Restriction," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 113(1), pages 67-92.
    11. Guido Friebel & Sergei Guriev, 2006. "Smuggling Humans: A Theory of Debt-financed Migration," Journal of the European Economic Association, MIT Press, vol. 4(6), pages 1085-1111, December.
    12. Djajić, Slobodan & Mesnard, Alice, 2015. "Guest workers in the underground economy," Labour Economics, Elsevier, vol. 35(C), pages 53-62.
    13. Magris, Francesco & Russo, Giuseppe, 2016. "Fiscal Revenues and Commitment in Immigration Amnesties," European Journal of Political Economy, Elsevier, vol. 42(C), pages 75-90.
    14. Slobodan Djajić & Alexandra Vinogradova, 2019. "Immigration Policies and the Choice between Documented and Undocumented Migration," Economica, London School of Economics and Political Science, vol. 86(341), pages 201-228, January.
    15. Vaira-Lucero, Matias & Nahm, Daehoon & Tani, Massimiliano, 2012. "The Impact of the 1996 US Immigration Policy Reform (IIRIRA) on Mexican Migrants' Remittances," IZA Discussion Papers 6546, Institute of Labor Economics (IZA).
    16. Artjoms Ivlevs, 2006. "Migration and Foreign Direct Investment in the Globalization Context: the Case of a Small Open Economy," Development Working Papers 209, Centro Studi Luca d'Agliano, University of Milano.
    17. O'Rourke, Kevin H. & Sinnott, Richard, 2006. "The determinants of individual attitudes towards immigration," European Journal of Political Economy, Elsevier, vol. 22(4), pages 838-861, December.
    18. Bernard Hoekman & Çağlar Özden, 2010. "The Euro–Mediterranean Partnership: Trade in Services as an Alternative to Migration?," Journal of Common Market Studies, Wiley Blackwell, vol. 48(4), pages 835-857, September.
    19. Slobodan Djajić & Michael S. Michael, 2014. "Controlling Illegal Immigration: On the Scope for Cooperation with a Transit Country," Review of International Economics, Wiley Blackwell, vol. 22(4), pages 808-824, September.
    20. Djajic, Slobodan & Mesnard, Alice, 2014. "Guest Workers in the Underground Economy," CEPR Discussion Papers 10074, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    policy; immigration; permanent; guest-worker; Mode IV; illegal; cooperation;
    All these keywords.

    JEL classification:

    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp2871. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.