Strategic Immigration Policies and Welfare in Heterogeneous Countries

Masahisa Fujita and Shlomo Weber
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Shlomo Weber: Southern Methodist University

No 2004.2, Working Papers from Fondazione Eni Enrico Mattei

Abstract: In this paper we consider a model with two industrialised countries and immigrants that come from “the rest of the world”. The countries are distinguished on the basis of three parameters: population size, bias towards 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 quotas. 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 county 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 harmonised immigration policies that may improve the welfare of both countries.

Keywords: Immigration quotas; Heterogeneity; Production complementarity; Welfare; Policy Harmonisation (search for similar items in EconPapers)
JEL-codes: C72 F22 O3 R1 (search for similar items in EconPapers)
Date: 2004-01
New Economics Papers: this item is included in nep-geo
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Citations: View citations in EconPapers (13)

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Related works:
Working Paper: Strategic immigration policies and welfare in heterogeneous countries (2003)
Working Paper: Strategic Immigration Policies and Welfare in Heterogeneous Countries (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2004.2

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