Immigration Quotas in the Globalized Economy

Journal of the New Economic Association, 2010, issue 7, 10-23

Abstract: We consider a model with two industrialized countries facing a flow of high-skilled immigrants from the "rest of the world". The countries, that choose immigration quotas, differ in degree of labor complementarity between the natives and immigrants, the population size, and level of cultural friction. We show that the total number of immigrants in equilibrium can be excessive, so that coordinated and harmonized immigration policies may improve the welfare of both countries. It is not necessarily true though that both countries would be better off by reducing the number of immigrants. If countries' characteristics are sufficiently diverse, no country could be better off by reducing its immigrant quota, while the other would benefit from a larger number of immigrants.

Keywords: intra-country heterogeneity; labor complementarity; immigration quota; policy harmonization (search for similar items in EconPapers)
JEL-codes: C72 F22 O3 R1 (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:nea:journl:y:2010:i:7:p:10-23

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