The social preferences of the native inhabitants, and the decision how many asylum seekers to admit

Oded Stark, Marcin Jakubek and Krzysztof Szczygielski

No 126, University of Tübingen Working Papers in Business and Economics from University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics

Abstract: We consider a tax-funded policy of admitting and integrating asylum seekers in a country in which the incomes of the native inhabitants are differentiated; for the sake of simplicity, we assume that there are just two groups of native inhabitants: high-income natives and low-income natives. As a consequence of their social preferences, the latter experience disutility caused by relative deprivation. Because integrating the asylum seekers into the mainstream labor force and thereby into the income distribution of the native population 'from below' reduces the relative deprivation of the low-income natives, admitting and integrating asylum seekers can be socially beneficial. We derive the optimal number of asylum seekers by maximizing the natives' social welfare function that incorporates these considerations. We find that as long as the cost of admission and integration is not exceptionally high, this number is strictly positive. We then address the issue of how to distribute a given number of asylum seekers among several receiving countries. We find that, rather than allocating the asylum seekers in proportion to the population of each country, aggregate welfare will be maximized through an allocation that is increasing in the within-country difference between the incomes of the high-income natives and the low-income natives. Additionally, we formulate conditions under which admission of the optimal number of asylum seekers is socially preferable to a direct transfer of income from high-income natives to low-income natives.

Keywords: Admission and integration of asylum seekers; Social preferences; Relative deprivation; Tax-funded integration policy; Maximization of social welfare (search for similar items in EconPapers)
JEL-codes: D60 F02 F22 I31 J61 J68 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/209680/1/1683682327.pdf (application/pdf)

Related works:
Journal Article: The social preferences of the native inhabitants, and the decision how many asylum seekers to admit (2020)
Working Paper: The social preferences of the native inhabitants, and the decision how many asylum seekers to admit (2019)
Working Paper: The Social Preferences of the Native Inhabitants, and the Decision How Many Asylum Seekers to Admit (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuewef:126

DOI: 10.15496/publikation-36588

Access Statistics for this paper

More papers in University of Tübingen Working Papers in Business and Economics from University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().