Prejudice and Immigration

Paolo Giordani and Michele Ruta

No 904, Working Papers CELEG from Dipartimento di Economia e Finanza, LUISS Guido Carli

Abstract: We study immigration policy in a small open receiving economy under self-selection of migrants. We show that immigration policy choice affects and is affected by the migratory decisions of skilled and unskilled foreign workers. From this interaction multiple equilibria may arise, which are driven by the natives' expectations on the migrants' size and skill composition (and, hence, on the welfare effects of immigration). In particular, pessimistic (optimistic) beliefs induce a country to impose higher (lower) barriers to immigration, which crowd out (crowd in) skilled migrants and thus confirm initial beliefs. This self-fulfilling mechanism sustains the endogenous formation of an anti or pro-immigration "prejudice". These insights may help rationalize the cross-country variation in attitudes towards immigration and choices of immigration policy.

Keywords: Immigration policy; skilled/unskilled workers; small open economy; multiple equilibria. (search for similar items in EconPapers)
JEL-codes: F22 J24 J61 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (6)

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Working Paper: Prejudice and Immigration (2008)
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