Optimal Immigration Policy: Permanent, Guest-Worker, or Mode IV?

Maurice Schiff

No 2871, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Host countries have implemented permanent and guest-worker (GW) immigration programs in recent decades, while the temporary movement of service providers under Mode IV of the GATS is one of the issues being negotiated at the Doha Round of the WTO. Though decisions on what programs to adopt have acquired increased urgency, the task has been complicated by host countries’ concern with migrants’ massive overstaying in past GW programs. This paper contributes to the debate by examining these migration regimes in a model in which the host country maximizes an objective function with respect to i) the size of the migration program, and – in the case of temporary migration – ii) the value of a bond employers must buy and iii) the share of migrants’ income whose payment is deferred. The maximization also takes into account the impact of the policy on source country cooperation on illegal immigration, migrants’ incentives and their preference for overstaying. The model solves for the policy measures, the overstaying probability, and the level of illegal migration. The paper concludes that the optimal policy is a combination of Mode IV-type and permanent migration.

Keywords: policy; immigration; permanent; guest-worker; Mode IV; illegal; cooperation (search for similar items in EconPapers)
JEL-codes: F20 F22 J61 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2007-06
New Economics Papers: this item is included in nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
https://docs.iza.org/dp2871.pdf (application/pdf)

Related works:
Working Paper: Optimal Immigration Policy: Permanent, Guest-Worker, or Mode IV? (2007)
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:iza:izadps:dp2871

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().