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Prejudice and Immigration

  • Paolo E. Giordani

    ()

    (Department of Economics and Business, LUISS Guido Carli University)

  • Michele Ruta

    ()

    (World Trade Organization, Economics Research Division)

We study immigration policy in a small open receiving economy under self-selection of migrants. We show that immigration policy choice affects and is affected by the migratory decisions of skilled and unskilled foreign workers. From this interaction multiple equilibria may arise, which are driven by the natives' expectations on the migrants' size and skill composition (and, hence, on the welfare effects of immigration). In particular, pessimistic (optimistic) beliefs induce a country to impose higher (lower) barriers to immigration, which crowd out (crowd in) skilled migrants and thus confirm initial beliefs. This self-fulfilling mechanism sustains the endogenous formation of an anti or pro-immigration "prejudice". These insights may help rationalize the cross-country variation in attitudes towards immigration and choices of immigration policy.

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File URL: http://static.luiss.it/RePEc/pdf/celegw/0904.pdf
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Paper provided by Dipartimento di Economia e Finanza, LUISS Guido Carli in its series Working Papers CELEG with number 0904.

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Date of creation: 2009
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Handle: RePEc:lui:celegw:0904
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  1. 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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