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

Maurice Schiff

No 3083, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Immigration continues to be on the forefront of the policy debate on both sides of the Atlantic. A number of reforms of permanent and guest-worker (GW) immigration programs are being considered, and the temporary movement of service providers under Mode IV (GATS) is being negotiated at the Doha Round of the WTO. This paper contributes to the debate by examining these programs in a model where the host country government maximizes its objective function with respect to three policy instruments: the share of migrants’ deferred income payment, the value of the bond employers must post and forfeit if GWs overstay, and the size of the program. Circular migration and illegal GWs’ status regularization are considered. The paper shows that i) the optimal value of the bond is zero, ii) Mode IV is preferable to GW migration; iii) the optimal policy package consists of Mode IV and permanent migration, and iv) incorporating circular migration improves the policy package. Additional policy implications are also provided.

Keywords: permanent; Mode IV; guest-worker; immigration; overstaying (search for similar items in EconPapers)
JEL-codes: F20 F22 J61 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2007-09
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 (17)

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Working Paper: Optimal Immigration Policy: Permanent, Guest-Worker, or Mode IV? (2007)
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