Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80078
Authors: 
Giordani, Paolo E.
Ruta, Michele
Year of Publication: 
2012
Series/Report no.: 
WTO Staff Working Paper ERSD-2012-06
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.
Subjects: 
Immigration policy
skilled/unskilled workers
small economy
multiple equilibria
JEL: 
F22
J24
J61
Document Type: 
Working Paper

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