Self-confirming immigration policy

Paolo Giordani and Michele Ruta

No ERSD-2012-06, WTO Staff Working Papers from World Trade Organization (WTO), Economic Research and Statistics Division

Abstract: We study immigration policy in a small receiving economy under self-selection of migrants. We show that a non-discriminatory 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 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. We discuss how the adoption of a skill-selective policy affects this result.

Keywords: Immigration policy; skilled/unskilled workers; small economy; multiple equilibria (search for similar items in EconPapers)
JEL-codes: F22 J24 J61 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Self-confirming immigration policy (2016)
Working Paper: Self-Confirming Immigration Policy (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wtowps:ersd201206

DOI: 10.30875/9a938d34-en

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