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Managing Migration through Conflicting Policies: an Option-theory Perspective

Author

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  • Michele Moretto

    () (Universit… di Padova)

  • Sergio Vergalli

    () (Universit… di Brescia)

Abstract

We try to determine whether it is better for a government to tighten or relax limits for immigrants in order to control migration inflows. To this end, we use a real option approach to migration choice that assumes that the decision to migrate can be described as an irreversible investment decision. Our results show that promoting uncertainty over migration limit may improve the government's control on migration inflows (quotas). In particular, we show that if the government controls the information related to the immigration stock it may delay the mass entry of immigrants, maintaining the required stock in the long run and controlling the flows in the short run.

Suggested Citation

  • Michele Moretto & Sergio Vergalli, 2010. "Managing Migration through Conflicting Policies: an Option-theory Perspective," "Marco Fanno" Working Papers 0110, Dipartimento di Scienze Economiche "Marco Fanno".
  • Handle: RePEc:pad:wpaper:0110
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    References listed on IDEAS

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    Cited by:

    1. Yu-Fu Chen & Michael Funke, 2010. "Booms, Recessions And Financial Turmoil: A Fresh Look At Investment Decisions Under Cyclical Uncertainty," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(s1), pages 290-317, July.
    2. Sergio Vergalli, 2011. "Entry and Exit Strategies in Migration Dynamics," Journal of Labor Research, Springer, vol. 32(4), pages 362-389, December.

    More about this item

    Keywords

    Immigration; Real Option;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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