Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/117881
Authors: 
Fujita, Masahisa
Weber, Shlomo
Year of Publication: 
2004
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 2.2004
Abstract: 
In this paper we consider a model with two industrialised countries and immigrants that come from “the rest of the world”. The countries are distinguished on the basis of three parameters: population size, bias towards immigrants, and production complementarity between native population and immigrants. We consider a non-cooperative game where each country makes a strategic choice of its immigration quotas. We first show that our game admits a unique pure strategy Nash equilibrium and then study the welfare implications of countries' choices. It turns out that a county with a higher degree of production complementarity and a higher level of tolerance towards immigrants would allow a larger immigration quota and achieve a higher welfare level. Our results call for coordinated and harmonised immigration policies that may improve the welfare of both countries.
Subjects: 
Immigration quotas
Heterogeneity
Production complementarity
Welfare
Policy Harmonisation
JEL: 
C72
F22
O3
R1
Document Type: 
Working Paper

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