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Workers Without Borders? Culture, Migration and the Political Limits to Globalization

  • Sanjay Jain

    ()

    (University of Virginia)

  • Sumon Majumdar

    ()

    (Queen's University)

  • Sharun Mukand

    ()

    (Tufts University)

This paper examines the role of cultural factors in driving the politics and shape of migration policy. We show that there exists a broad political failure that results in inefficiently high barriers restricting the import of temporary foreign workers and also admitting an inefficiently large number of permanent migrants, but not enough to fill any labor shortage in the economy. We show that countries that are poor at cultural assimilation are better positioned to take advantage of short-term foreign worker programs than more culturally diverse and tolerant countries. A striking implication is that relaxing restrictions on the mobility of migrant workers across employers has the potential to raise host country welfare even though it increases migrant wages and lowers individual firm's profits. We also demonstrate the existence of multiple equilibria: some countries have mostly temporary migration programs and see a low degree of cultural assimilation by the migrants, while other countries rely more on permanent migrants and see much more assimilation.

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File URL: http://qed.econ.queensu.ca/working_papers/papers/qed_wp_1196.pdf
File Function: First version 2008
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Paper provided by Queen's University, Department of Economics in its series Working Papers with number 1196.

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Length: 36 pages
Date of creation: Dec 2008
Date of revision:
Handle: RePEc:qed:wpaper:1196
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Web page: http://qed.econ.queensu.ca/
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  1. Christian Dustmann, 1996. "Temporary Migration, Human capital and Language Fluency of Migrants," Discussion Papers 96-21 ISSN 1350-6722, University College London, Department of Economics.
  2. Walmsley, Terrie L. & Winters, L. Alan, 2005. "Relaxing the Restrictions on the Temporary Movement of Natural Persons: A Simulation Analysis," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 20, pages 688-726.
  3. Gianmarco I.P. Ottaviano & Giovanni Peri, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," NBER Working Papers 14188, National Bureau of Economic Research, Inc.
  4. Assaf Razin & Effraim Sadka & Phillip Swagel, 1998. "Tax Burden and Migration: A Political Economy Theory and Evidence," NBER Working Papers 6734, National Bureau of Economic Research, Inc.
  5. Klein, Paul & Ventura, Gustavo, 2009. "Productivity differences and the dynamic effects of labor movements," Journal of Monetary Economics, Elsevier, vol. 56(8), pages 1059-1073, November.
  6. Edward P. Lazear, 1995. "Culture and Language," NBER Working Papers 5249, National Bureau of Economic Research, Inc.
  7. Facchini, Giovanni & Willmann, Gerald, 2005. "The political economy of international factor mobility," Journal of International Economics, Elsevier, vol. 67(1), pages 201-219, September.
  8. Alesina, Alberto & Spolaore, Enrico, 1997. "On the Number and Size of Nations," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1027-56, November.
  9. George J. Borjas, 1994. "The Economic Benefits from Immigration," NBER Working Papers 4955, National Bureau of Economic Research, Inc.
  10. Elhanan Helpman & Oleg Itskhoki & Stephen Redding, 2008. "Wages, Unemployment and Inequality with Heterogeneous Firms and Workers," NBER Working Papers 14122, National Bureau of Economic Research, Inc.
  11. 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, 05.
  12. Giovanni Facchini & Anna Maria Mayda, 2006. "Individual Attitudes towards Immigrants: Welfare-State Determinants Across Countries," CReAM Discussion Paper Series 0604, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  13. Alesina, Alberto & La Ferrara, Eliana, 2005. "Ethnic Diversity and Economic Performance," Scholarly Articles 4553005, Harvard University Department of Economics.
  14. Richard B. Freeman, 2006. "People Flows in Globalization," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 145-170, Spring.
  15. Bauer, Thomas K. & Lofstrom, Magnus & Zimmermann, Klaus F., 2000. "Immigration Policy, Assimilation of Immigrants and Natives' Sentiments towards Immigrants: Evidence from 12 OECD-Countries," IZA Discussion Papers 187, Institute for the Study of Labor (IZA).
  16. Geoffrey Carliner, 1995. "The Language Ability of U.S. Immigrants: Assimilation and Cohort Effects," NBER Working Papers 5222, National Bureau of Economic Research, Inc.
  17. David Card & Christian Dustmann & Ian Preston, 2012. "Immigration, Wages, And Compositional Amenities," Journal of the European Economic Association, European Economic Association, vol. 10(1), pages 78-119, 02.
  18. Stephen Coate & Stephen Morris, . ""Policy Persistence ''," CARESS Working Papres 95-19, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
  19. 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.
  20. István Kónya, 2007. "Optimal Immigration and Cultural Assimilation," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 367-391.
  21. Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer.
  22. Williamson, Jeffrey G., 1996. "Globalization, Convergence, and History," The Journal of Economic History, Cambridge University Press, vol. 56(02), pages 277-306, June.
  23. Besley, Timothy & Coate, Stephen, 1998. "Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 88(1), pages 139-56, March.
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