Optimal Immigration, Assimilation and Trade

István Kónya

No 507, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: The paper develops a general equilibrium model of migration, assimilation and trade, using a random matching framework of culture and trade. The market equilibrium and the social plannerÕs solution are contrasted and policy implications are given. The model predicts that the presence of immigrants who do not assimilate into the mainstream culture is economically inefficient, but whether such migration occurs depends on the underlying parameters. Because of the endogeneity of the migration decision, care must be taken to select the optimal policy instruments. In particular, subsidizing assimilation or auctioning immigration permits do not achieve the first best. Instead, a mix of selective immigration, border control and aid to the source country can be used to promote efficiency.

Keywords: culture; immigration policy; optimal immigration (search for similar items in EconPapers)
JEL-codes: D62 F22 Z10 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2001-04-01
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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:507

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