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Immigration as a commitment device

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  • Alexander Kemnitz

Abstract

This paper shows that the toleration of immigrants who are on average less skilled than natives can be part of a support-maximizing government policy, despite a general political bias in favor of the poor. We make this point in a simple model with redistributive unemployment insurance. Once wage contracts are binding, the government has an incentive to increase the unemployment benefit, leading to excessive unemployment. Affecting the political balance within the constituency, immigrants can serve as a commitment device against this time-inconsistency. We show that this possibility can be greatly promoted by restrictions on political naturalization.
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Suggested Citation

  • Alexander Kemnitz, 2006. "Immigration as a commitment device," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(2), pages 299-313, June.
    • Handle: RePEc:spr:jopoec:v:19:y:2006:i:2:p:299-313
    DOI: 10.1007/s00148-005-0042-y
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    More about this item

    Keywords

    Immigration; Welfare state; Democracy; Time inconsistency; D72; F22; J68;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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