Managing Migration through Quotas: an Option-theory Perspective
Recent European Legislation on immigration has revealed a particular paradox on migration policies. On one hand, the trend of recent legislation points to the increasing closure of frontiers (OECD 1999, 2001, 2004), also by using immigration quotas. On the other hand, there is an increase of regolarization, i.e., European policies are becoming less tight. Our aim here is to study these counterbalanced and opposite policies in European immigration legislation in an unified framework. To do this, we have used a real option approach to migration choice that assumes that the decision to migrate can be described as an irreversible investment decision where quotas rappresent an upper bound limit. Our results show the paradox of counterbalancing immigration policies is not odd but it could be in line with an optimal policy to control migration inflow. In particular, we show that if the government controls the information related to the immigration quota system it could delay the mass entry of immigrants maintaining, in the long run, the required immigration stock and controlling the flows in the short-run.
|Date of creation:||2008|
|Date of revision:|
|Contact details of provider:|| Postal: Via S. Faustino 74/B, 25122 Brescia|
Web page: http://www.unibs.it/atp/page.1019.0.0.0.atp?node=224
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bauer, Thomas K. & Epstein, Gil S. & Gang, Ira N., 2002.
"Herd Effects or Migration Networks? The Location Choice of Mexican Immigrants in the U.S,"
IZA Discussion Papers
551, Institute for the Study of Labor (IZA).
- Ira N. Gang & Thomas Bauer & Gil S. Epstein, 2002. "Herd Effects or Migration Networks? The Location Choice of Mexican Immigrants in the U.S," Departmental Working Papers 200216, Rutgers University, Department of Economics.
- Bauer, Thomas & Epstein, Gil S & Gang, Ira, 2002. "Herd Effects or Migration Networks? The Location Choice of Mexican Immigrants in the US," CEPR Discussion Papers 3505, C.E.P.R. Discussion Papers.
- John V. Leahy, 1993. "Investment in Competitive Equilibrium: The Optimality of Myopic Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 108(4), pages 1105-1133.
- Sergio Vergalli & Michele Moretto, 2005.
2005.108, Fondazione Eni Enrico Mattei.
- Avinash Dixit, 1992.
"Irreversible Investment with Uncertainty and Scale Economies,"
STICERD - Theoretical Economics Paper Series
240, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Dixit, Avinash, 1995. "Irreversible investment with uncertainty and scale economies," Journal of Economic Dynamics and Control, Elsevier, vol. 19(1-2), pages 327-350.
- Avinash Dixit, 1992. "Irreversible investment with uncertainty and scale economies," LSE Research Online Documents on Economics 19372, London School of Economics and Political Science, LSE Library.
- Epstein, Gil S. & Gang, Ira N., 2004.
"Ethnic Networks and International Trade,"
IZA Discussion Papers
1232, Institute for the Study of Labor (IZA).
- Moretto, Michele, 2008.
"Competition and irreversible investments under uncertainty,"
Information Economics and Policy,
Elsevier, vol. 20(1), pages 75-88, March.
- Michele Moretto, 2007. "Competition and Irreversible Investments under Uncertainty," "Marco Fanno" Working Papers 0058, Dipartimento di Scienze Economiche "Marco Fanno".
- Michele Moretto, 2003. "Competition and Irreversible Investments under Uncertainty," Working Papers 2003.32, Fondazione Eni Enrico Mattei.
- Cesare Dosi & Michele Moretto, 2001.
"Is Ecolabelling a Reliable Environmental Policy Measure?,"
Environmental & Resource Economics,
Springer;European Association of Environmental and Resource Economists, vol. 18(1), pages 113-127, January.
- Cesare Dosi & Michele Moretto, 1999. "Is Ecolabelling a Reliable Environmental Policy Measure?," Working Papers 1999.9, Fondazione Eni Enrico Mattei.
- Hill, John K., 1987. "Immigrant decisions concerning duration of stay and migratory frequency," Journal of Development Economics, Elsevier, vol. 25(1), pages 221-234, February.
- Sergio Vergalli, 2008.
"The Role of Community in Migration Dynamics,"
CEIS, vol. 22(3), pages 547-567, 09.
- Burda,M.C., 1995.
"Migration and the Option Value of Waiting,"
597, Stockholm - International Economic Studies.
- Burda, Michael C, 1995. "Migration and the Option Value of Waiting," CEPR Discussion Papers 1229, C.E.P.R. Discussion Papers.
- M. C. Burda, 1995. "Migration and the Option Value of Waiting," SFB 373 Discussion Papers 1995,58, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Epstein, Gil S. & Nitzan, Shmuel, 2005.
"The Struggle over Migration Policy,"
IZA Discussion Papers
1533, Institute for the Study of Labor (IZA).
- Dixit, Avinash K. & Pindyck, Robert S. & Massachusetts Institute of Technology. Center for Energy and Environmental Policy Research., 2003.
"Expandability, reversibility, and optimal capacity choice,"
97-006WP., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Avinash K. Dixit & Robert S. Pindyck, 1998. "Expandability, Reversibility, and Optimal Capacity Choice," NBER Working Papers 6373, National Bureau of Economic Research, Inc.
- Timothy J. Hatton, 2004. "Seeking asylum in Europe," Economic Policy, CEPR;CES;MSH, vol. 19(38), pages 5-62, 04.
- Bartolini, Leonardo, 1995. "Foreign investment quotas and rent extraction under uncertainty," Journal of International Economics, Elsevier, vol. 38(1-2), pages 25-49, February.
- Sergio Vergalli, 2007.
"Entry and Exit Strategies in Migration Dynamics,"
0701, University of Brescia, Department of Economics.
- Holger Feist, 1998. "Wage-distance regulation in social-welfare programs: An option-theory perspective," Journal of Economics, Springer, vol. 68(3), pages 271-293, October.
- Mahmudul Anam & Shin-Hwan Chiang & Lieng Hua, 2008. "Uncertainty and International Migration: An Option Cum Portfolio Model," Journal of Labor Research, Springer, vol. 29(3), pages 236-250, September.
- Steven R. Grenadier, 2002. "Option Exercise Games: An Application to the Equilibrium Investment Strategies of Firms," Review of Financial Studies, Society for Financial Studies, vol. 15(3), pages 691-721.
- Tito Boeri & Herbert Brücker, 2005. "Why are Europeans so tough on migrants?," Economic Policy, CEPR;CES;MSH, vol. 20(44), pages 629-703, October.
When requesting a correction, please mention this item's handle: RePEc:ubs:wpaper:0805. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Matteo Galizzi)
If references are entirely missing, you can add them using this form.