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Immigration Policies, Labor Complementarities, Population Size and Cultural Frictions: Theory and Evidence

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Listed:
  • Weber, Shlomo
  • Osang, Thomas

Abstract

In this paper we consider a simple model of international migration developed in Fujita and Weber (2010). There are two countries A and B, that differ in population size, degree of labor complementarity between natives and immigrants, as well as cultural attitudes towards immigrants. The countries select immigration quotas for the world population of immigrants. We apply the existence result of Fujita-Weber and show that in equilibrium the larger country attracts more immigrants, while choosing a lower quota than its smaller counterpart. It also turns out that higher degree of labor complementarity between natives and immigrants and a lower degree of cultural friction between two groups yield higher immigration quota. Finally, we test the empiricalvalidity of the model using time-series country-level data and demonstrate that both cross-section and panel data approaches support several of the key theoretical findings.

Suggested Citation

  • Weber, Shlomo & Osang, Thomas, 2016. "Immigration Policies, Labor Complementarities, Population Size and Cultural Frictions: Theory and Evidence," CEPR Discussion Papers 11526, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:11526
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    References listed on IDEAS

    as
    1. Anna Maria Mayda, 2006. "Who Is Against Immigration? A Cross-Country Investigation of Individual Attitudes toward Immigrants," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 510-530, August.
    2. Bauer, Thomas K. & Lofstrom, Magnus & Zimmermann, Klaus F., 2000. "Immigration Policy, Assimilation of Immigrants and Natives' Sentiments towards Immigrants: Evidence from 12 OECD-Countries," IZA Discussion Papers 187, Institute of Labor Economics (IZA).
    3. Masahisa Fujita & Jacques‐François Thisse, 2003. "Does Geographical Agglomeration Foster Economic Growth? And Who Gains and Loses from It?," The Japanese Economic Review, Japanese Economic Association, vol. 54(2), pages 121-145, June.
    4. Carole Juliette Maignan (ed.) & Gianmarco Ottaviano (ed.) & Dino Pinelli (ed.), 2003. "Economic Growth, Innovation, Cultural Diversity. What Are We All Talking About? A Critical Survey of the State-of-the-art," Working Papers 2003.12, Fondazione Eni Enrico Mattei.
    5. Mayda, Anna Maria, 2005. "Who is Against Immigration? A Cross-Country Investigation of Individual Attitudes Towards Immigration," CEPR Discussion Papers 5055, C.E.P.R. Discussion Papers.
    6. Facchini, Giovanni & Mayda, Anna Maria, 2006. "Individual Attitudes towards Immigrants: Welfare-State Determinants Across Countries," IZA Discussion Papers 2127, Institute of Labor Economics (IZA).
    7. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, April.
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    More about this item

    Keywords

    Immigration quotas; Nash equilibrium; Labor complementarity; Cultural frictions; Panel data; Fixed effects;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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