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Can guest worker schemes reduce illegal migration ?

  • Amin, Mohammad
  • Mattoo, Aaditya

The authors analyze recent efforts at international cooperation to limit illegal migration, particularly through the use of legal migration avenues like guest worker schemes. They show that while guest worker schemes may be desirable as an avenue of international migration, they are an inefficient instrument to induce cooperation on illegal migration. On the one hand, guest worker schemes suffer from a negative selection problem relative to illegal migration, which tends to erode their attractiveness to source countries. On the other hand, guest worker schemes increase total (legal and illegal) migration which make them a costly compensating device for the host country. Moreover, guest worker schemes create additional pressure on host countries to implement tough laws against illegal immigration even when the host finds such laws undesirable. Thus, less favorable treatment of illegal immigrants, as in California Proposition 187, may be an inevitable rather than incidental outcome of reliance on guest worker schemes. In contrast, countries that are willing to use transfers and other forms of economic assistance to induce source countries to cooperate can afford relatively liberal treatment of illegal immigrants.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3828.

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Date of creation: 01 Feb 2006
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Handle: RePEc:wbk:wbrwps:3828
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  1. Bond, Eric W. & Chen, Tain-Jy, 1987. "The welfare effects of illegal immigration," Journal of International Economics, Elsevier, vol. 23(3-4), pages 315-328, November.
  2. Chiswick, Barry R., 2000. "Are Immigrants Favorably Self-Selected? An Economic Analysis," IZA Discussion Papers 131, Institute for the Study of Labor (IZA).
  3. Pia M. Orrenius, 2001. "Illegal immigration and enforcement along the U.S.-Mexico border; an overview," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q I, pages 2-11.
  4. Gaytan-Fregoso, Helena & Lahiri, Sajal, 2000. "Foreign aid and illegal immigration," Journal of Development Economics, Elsevier, vol. 63(2), pages 515-527, December.
  5. Ethier, Wilfred J, 1986. "Illegal Immigration," American Economic Review, American Economic Association, vol. 76(2), pages 258-62, May.
  6. Allan Drazen & Nuno Limão, 2004. "Government Gains from Self-Restraint: A Bargaining Theory of Inefficient Redistribution," NBER Working Papers 10375, National Bureau of Economic Research, Inc.
  7. Gordon H. Hanson & Antonio Spilimbergo, 1996. "Illegal Immigration, Border Enforcement, and Relative Wages: Evidence from Apprehensions at the U.S.-Mexico Border," Research Department Publications 4036, Inter-American Development Bank, Research Department.
  8. Ethier, Wilfred J, 1986. "Illegal Immigration: The Host-Country Problem," American Economic Review, American Economic Association, vol. 76(1), pages 56-71, March.
  9. Jones, Stephen R. G., 1989. "Have your lawyer call my lawyer : Bilateral delegation in bargaining situations," Journal of Economic Behavior & Organization, Elsevier, vol. 11(2), pages 159-174, March.
  10. Gordon M Myers & Yorgos Y Papageorgiou, 1997. "Immigration Control and the Welfare State," Department of Economics Working Papers 1997-01, McMaster University.
  11. Knack, Stephen & Keefer, Philip, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1251-88, November.
  12. Aaron S. Edlin & Benjamin E. Hermalin, 1997. "Contract Renegotiation in Agency Problems," Microeconomics 9705002, EconWPA.
  13. Chiswick, Barry R, 1988. "Illegal Immigration and Immigration Control," Journal of Economic Perspectives, American Economic Association, vol. 2(3), pages 101-15, Summer.
  14. Drazen, Allan & Limão, Nuno, 2003. "Government Gains from Self-Restraint: A Bargaining Theory of Inefficient Redistribution Policies," CEPR Discussion Papers 4007, C.E.P.R. Discussion Papers.
  15. Bandyopadhyay, Subhayu & Bandyopadhyay, Sudeshna Champati, 1998. "Illegal immigration: a supply side analysis," Journal of Development Economics, Elsevier, vol. 57(2), pages 343-360.
  16. Chau, Nancy H, 2001. "Strategic Amnesty and Credible Immigration Reform," Journal of Labor Economics, University of Chicago Press, vol. 19(3), pages 604-34, July.
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