Strategic Immigration Policies and Welfare in Heterogeneous Countries

Masahisa Fujita and Shlomo Weber
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Shlomo Weber: Department of Economics, Southern methodist University

No 569, KIER Working Papers from Kyoto University, Institute of Economic Research

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 Complementarity; Welfare; Policy Harmonization. (search for similar items in EconPapers)
JEL-codes: C72 F22 O3 R1 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2003-04
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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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