IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp4528.html
   My bibliography  Save this paper

Immigration, Citizenship, and the Size of Government

Author

Listed:
  • Ortega, Francesc

    (Queens College, CUNY)

Abstract

This paper analyzes the political sustainability of the welfare state in an environment where immigration is the main demographic force and where governments are able to influence the size and skill composition of immigration flows. Specifically, I present a dynamic political-economy model where both income redistribution and immigration policy are chosen by majority vote. Voters take into account their children's prospects of economic mobility and the future political consequences of today's policies. Over time, the skill distribution evolves due to intergenerational skill upgrading and immigration. I consider three immigration and citizenship regimes. In the first, immigrants stay permanently in the country and citizenship is obtained by birthplace (jus soli). In the second regime immigration is also permanent but citizenship is passed only by bloodline (jus sanguinis). In the third regime immigrants are only admitted temporarily and cannot vote. Our main finding is that under permanent migration and jus soli there exist equilibria where income redistribution is sustained indefinitely, despite constant skill upgrading in the population. However, this is not the case in the other two regimes. The crucial insight is that unskilled voters trade off the lower wages from larger unskilled immigration with the increased political support for redistributive transfers provided by the children of the current immigrants. In contrast, in the regimes where immigrants and their children do not gain the right to vote, unskilled voters oppose any unskilled immigration and political support for income transfers vanishes. We argue that these mechanisms have important implications for the ongoing debates over comprehensive immigration reform in the US and elsewhere.

Suggested Citation

  • Ortega, Francesc, 2009. "Immigration, Citizenship, and the Size of Government," IZA Discussion Papers 4528, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp4528
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp4528.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Roland Benabou & Efe A. Ok, 2001. "Social Mobility and the Demand for Redistribution: The Poum Hypothesis," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 447-487.
    2. Barbera, S. & Maschler, M. & Shalev, J., 2001. "Voting for Voters: A Model of Electoral Evolution," Games and Economic Behavior, Elsevier, vol. 37(1), pages 40-78, October.
    3. David Card, 2005. "Is the New Immigration Really so Bad?," Economic Journal, Royal Economic Society, vol. 115(507), pages 300-323, November.
    4. Christian Dustmann & Ian Preston, 2006. "Is Immigration Good or Bad for the Economy? Analysis of Attitudinal Responses," Research in Labor Economics, in: The Economics of Immigration and Social Diversity, pages 3-34, Emerald Group Publishing Limited.
    5. Francesc Ortega & Giovanni Peri, 2009. "The Causes and Effects of International Migrations: Evidence from OECD Countries 1980-2005," NBER Working Papers 14833, National Bureau of Economic Research, Inc.
    6. Gordon H. Hanson & Kenneth Scheve & Matthew J. Slaughter, 2007. "Public Finance And Individual Preferences Over Globalization Strategies," Economics and Politics, Wiley Blackwell, vol. 19(1), pages 1-33, March.
    7. Francesc Ortega & Ryuichi Tanaka, 2007. "Gender specialization in households: An empirical analysis," Economics Working Papers 1021, Department of Economics and Business, Universitat Pompeu Fabra.
    8. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
    9. Francesc Ortega & Giovanni Peri, 2009. "The Causes and Effects of International Migrations: Evidence from OECD Countries 1980-2005," NBER Working Papers 14833, National Bureau of Economic Research, Inc.
    10. Anna Maria Mayda, 2006. "Who Is Against Immigration? A Cross-Country Investigation of Individual Attitudes toward Immigrants," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 510-530, August.
    11. Fabio Canova & Morten Ravn, 2000. "The Macroeconomic Effects of German Unification: Real Adjustments and the Welfare State," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(3), pages 423-460, July.
    12. Roc Armenter & Francesc Ortega, 2010. "Credible Redistributive Policies and Migration across US States," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(2), pages 403-423, April.
    13. Graziella Bertocchi & Chiara Strozzi, 2010. "The Evolution of Citizenship: Economic and Institutional Determinants," Journal of Law and Economics, University of Chicago Press, vol. 53(1), pages 95-136, February.
    14. Simone Bertoli & Jesus Fernandez-Huertas Moraga & Francesc Ortega, 2011. "Immigration Policies and the Ecuadorian Exodus," The World Bank Economic Review, World Bank Group, vol. 25(1), pages 57-76, March.
    15. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    16. Ortega, Francesc & Peri, Giovanni, 2009. "The Causes and Effects of International Labor Mobility: Evidence from OECD Countries 1980-2005," MPRA Paper 19183, University Library of Munich, Germany.
    17. Razin, Assaf & Sadka, Efraim & Swagel, Phillip, 2002. "Tax burden and migration: a political economy theory and evidence," Journal of Public Economics, Elsevier, vol. 85(2), pages 167-190, August.
    18. Ortega, Francesc, 2005. "Immigration quotas and skill upgrading," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1841-1863, September.
    19. Brooks,Robin & Razin,Assaf (ed.), 2005. "Social Security Reform," Cambridge Books, Cambridge University Press, number 9780521844956, October.
    20. Jim Dolmas & Gregory W. Huffman, 2004. "On The Political Economy Of Immigration And Income Redistribution," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(4), pages 1129-1168, November.
    21. Alessandro Lizzeri & Nicola Persico, 2004. "Why did the Elites Extend the Suffrage? Democracy and the Scope of Government, with an Application to Britain's "Age of Reform"," The Quarterly Journal of Economics, Oxford University Press, vol. 119(2), pages 707-765.
    Full references (including those not matched with items on IDEAS)

    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. Noel Gaston & Douglas R. Nelson, 2013. "Bridging Trade Theory And Labour Econometrics: The Effects Of International Migration," Journal of Economic Surveys, Wiley Blackwell, vol. 27(1), pages 98-139, February.
    2. Gonnot, Jérôme, 2022. "Taxation with representation: Understanding natives’ attitudes to foreigners’ voting rights," European Journal of Political Economy, Elsevier, vol. 71(C).
    3. Koukal, Anna Maria & Schafer, Patricia & Eichenberger, Reiner, 2021. "Enfranchising non-citizens: What drives natives’ willingness to share power?," Journal of Comparative Economics, Elsevier, vol. 49(4), pages 1088-1108.
    4. Akay, Alpaslan & Constant, Amelie & Giulietti, Corrado, 2014. "The impact of immigration on the well-being of natives," Journal of Economic Behavior & Organization, Elsevier, vol. 103(C), pages 72-92.
    5. Marcus H. Böhme & Sarah Kups, 2017. "The economic effects of labour immigration in developing countries: A literature review," OECD Development Centre Working Papers 335, OECD Publishing.
    6. Francesc Ortega, 2004. "Immigration and the survival of the welfare state," Economics Working Papers 815, Department of Economics and Business, Universitat Pompeu Fabra.
    7. Gonnot, Jérôme, 2020. "Taxation with Representation: The Political Economy of Foreigners’ Voting Rights," TSE Working Papers 20-1077, Toulouse School of Economics (TSE).
    8. Giovanni Facchini & Anna Maria Mayda, 2006. "Individual Attitudes towards Immigrants: Welfare-State Determinants across Countries," CESifo Working Paper Series 1768, CESifo.
    9. Giuranno, Michele G. & Rongili, Biswas, 2012. "Inter-jurisdictional migration and the size of government," MPRA Paper 42604, University Library of Munich, Germany.
    10. Francesc Ortega & Giovanni Peri, 2016. "The effect of income and immigration policies on international migration," World Scientific Book Chapters, in: The Economics of International Migration, chapter 11, pages 333-360, World Scientific Publishing Co. Pte. Ltd..
    11. Milo Bianchi & Paolo Buonanno & Paolo Pinotti, 2012. "Do Immigrants Cause Crime?," Journal of the European Economic Association, European Economic Association, vol. 10(6), pages 1318-1347, December.
    12. Alberto Alesina & Johann Harnoss & Hillel Rapoport, 2016. "Birthplace diversity and economic prosperity," Journal of Economic Growth, Springer, vol. 21(2), pages 101-138, June.
    13. Sanchis-Guarner, Rosa, 2023. "Decomposing the impact of immigration on house prices," Regional Science and Urban Economics, Elsevier, vol. 100(C).
    14. Sanchis-Guarner, Rosa, 2014. "First-come first-served: identifying the demand effect of immigration inflows on house prices," LSE Research Online Documents on Economics 58341, London School of Economics and Political Science, LSE Library.
    15. 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.
    16. Giovanni Facchini & Anna Maria Mayda, 2012. "Individual Attitudes Towards Skilled Migration: An Empirical Analysis Across Countries," The World Economy, Wiley Blackwell, vol. 35(2), pages 183-196, February.
    17. Giovanni Peri & Francesc Ortega, 2012. "The Role of Income and Immigration Policies in Attracting International Migrants," Working Papers 143, University of California, Davis, Department of Economics.
    18. Alberto Alesina & Johann Harnoss & Hillel Rapoport, 2021. "Immigration and the Future of the Welfare State in Europe," The ANNALS of the American Academy of Political and Social Science, , vol. 697(1), pages 120-147, September.
    19. Herbert Brücker & Philipp JH Schröder, 2011. "Migration regulation contagion," European Union Politics, , vol. 12(3), pages 315-335, September.
    20. Gianluca Orefice, 2010. "Skilled Migration and Economic Performances: Evidence from OECD Countries," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 146(IV), pages 781-820, December.

    More about this item

    Keywords

    redistributive policies; citizenship; immigration; political economy;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • I2 - Health, Education, and Welfare - - Education
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

    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:dp4528. 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.