What is the Optimal Immigration Policy? Migration, Jobs and Welfare

Joao Guerreiro, Sergio Rebelo () and Pedro Teles

No 26154, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the immigration policy that maximizes the welfare of the native population in an economy where the government designs an optimal redistributive welfare system and supplies public goods. We show that when the government can design different tax systems for immigrants and natives, free immigration is optimal. It is also optimal to use the tax system to encourage the immigration of high-skill workers and discourage that of low-skill workers. When immigrants and natives must be treated alike, banning low-skill immigration and allowing free immigration for high-skill workers is optimal. However, there might be no high-skill immigration when heavy taxes are levied on all high-skill workers, both natives and immigrants.

JEL-codes: F22 H21 (search for similar items in EconPapers)
Date: 2019-08
New Economics Papers: this item is included in nep-int, nep-ltv and nep-mig
Note: EFG
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Citations: View citations in EconPapers (8)

Published as Joao Guerreiro & Sergio Rebelo & Pedro Teles, 2020. "What Is the Optimal Immigration Policy? Migration, Jobs, and Welfare," Journal of Monetary Economics, .

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Journal Article: What is the optimal immigration policy? Migration, jobs, and welfare (2020)
Working Paper: What is the Optimal Immigration Policy? Migration, Jobs and Welfare (2019)
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