Strategic immigration policies and welfare in heterogeneous countries

Masahisa Fujita and Shlomo Weber

No 2003095, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: In this paper we consider a model with two industrialized countries and immigrants that come from "the rest of the world".The countries are distinguished on the basis of three parameters: population size, bias toward immigrants, and production complementarity between native population and immigrants. We consider a non-cooperative game where each country makes a strategic choice of its immigration quota. We first show that our game admits a unique pure strategy Nash equilibrium and then study the welfare implications of countries' choices. It turns out that a country with a higher degree of production complementarity and a higher level of tolerance towards immigrants would allow a larger immigration quota and achieve a higher welfare level. Our results call for coordinated and harmonized immigration policies that may improve the welfare of both countries.

Keywords: immigration quotas; heterogeneity; production comple- mentarity; welfare; policy harmonization (search for similar items in EconPapers)
JEL-codes: C72 F22 O3 R1 (search for similar items in EconPapers)
Date: 2003-12
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Citations: View citations in EconPapers (19)

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Related works:
Working Paper: Strategic Immigration Policies and Welfare in Heterogeneous Countries (2004)
Working Paper: Strategic Immigration Policies and Welfare in Heterogeneous Countries (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2003095

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