This paper revisits the puzzle of immigration policy: standard economic theory predicts that free immigration improves natives' welfare, but (with few historical exceptions) an open door policy is never implemented in practice. What rationalizes the puzzle? We first review the model of immigration policy where the policy maker maximizes national income of natives net of the tax burden of immigration (Borjas, 1995). We show that this model fails to provide realistic policy outcomes when the receiving region's technology is described by a standard Cobb-Douglas or CES function. Then we describe three extensions of this basic model that reconcile theory with evidence. The first introduces a cost of integration of the immigrant community in the destination country; the second takes into account the policy maker's redistributive concern across different social groups; the last extension considers positive spillover effects of (skilled) migrants on the receiving economy.

The Immigration Policy Puzzle / Giordani, Paolo; Michele, Ruta. - In: REVIEW OF INTERNATIONAL ECONOMICS. - ISSN 0965-7576. - 19:5(2011), pp. 922-935. [10.1111/j.1467-9396.2011.00995.x]

The Immigration Policy Puzzle

GIORDANI, PAOLO;
2011

Abstract

This paper revisits the puzzle of immigration policy: standard economic theory predicts that free immigration improves natives' welfare, but (with few historical exceptions) an open door policy is never implemented in practice. What rationalizes the puzzle? We first review the model of immigration policy where the policy maker maximizes national income of natives net of the tax burden of immigration (Borjas, 1995). We show that this model fails to provide realistic policy outcomes when the receiving region's technology is described by a standard Cobb-Douglas or CES function. Then we describe three extensions of this basic model that reconcile theory with evidence. The first introduces a cost of integration of the immigrant community in the destination country; the second takes into account the policy maker's redistributive concern across different social groups; the last extension considers positive spillover effects of (skilled) migrants on the receiving economy.
2011
Costs and benefits from immigration; immigration policy.
The Immigration Policy Puzzle / Giordani, Paolo; Michele, Ruta. - In: REVIEW OF INTERNATIONAL ECONOMICS. - ISSN 0965-7576. - 19:5(2011), pp. 922-935. [10.1111/j.1467-9396.2011.00995.x]
File in questo prodotto:
File Dimensione Formato  
sdarticle.pdf

Solo gestori archivio

Tipologia: Versione dell'editore
Licenza: Tutti i diritti riservati
Dimensione 160.75 kB
Formato Adobe PDF
160.75 kB Adobe PDF   Visualizza/Apri
Pubblicazioni consigliate

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11385/29252
Citazioni
  • Scopus 10
  • ???jsp.display-item.citation.isi??? 9
social impact