TY - JOUR
T1 - Time-consistent immigration policy under economic and cultural externalities
AU - Bisin, Alberto
AU - Zanella, Giulio
N1 - Publisher Copyright:
© CEPR, CESifo, Sciences Po, 2017.
Copyright:
Copyright 2021 Elsevier B.V., All rights reserved.
PY - 2017/7/1
Y1 - 2017/7/1
N2 - Discussions of immigration policy are typically framed in the context of their economic effects in receiving countries, notably labour market and fiscal effects. In this paper, we characterize immigration policy in a richer model where migrants are also a source of cultural externalities stemming from either preferences or the functioning of formal and informal institutions in receiving countries. While in terms of pure economic effects, immigrants do not generally have any more incentives than low-skilled natives to allow for more immigration in the future, this is not the case when accounting for cultural externalities. Therefore, insofar as past immigrants have a voice in affecting future policies, a time-consistent immigration policy entails back-loading; as natives attempt at limiting voice of immigrants in the future, the economic effects of immigration flows as well as the cultural externality they introduce. Furthermore, natives exploit any pre-commitment device to limit immigration flows, e.g. building ''walls'', limiting immigrants' political rights, or accumulating fiscal surpluses.
AB - Discussions of immigration policy are typically framed in the context of their economic effects in receiving countries, notably labour market and fiscal effects. In this paper, we characterize immigration policy in a richer model where migrants are also a source of cultural externalities stemming from either preferences or the functioning of formal and informal institutions in receiving countries. While in terms of pure economic effects, immigrants do not generally have any more incentives than low-skilled natives to allow for more immigration in the future, this is not the case when accounting for cultural externalities. Therefore, insofar as past immigrants have a voice in affecting future policies, a time-consistent immigration policy entails back-loading; as natives attempt at limiting voice of immigrants in the future, the economic effects of immigration flows as well as the cultural externality they introduce. Furthermore, natives exploit any pre-commitment device to limit immigration flows, e.g. building ''walls'', limiting immigrants' political rights, or accumulating fiscal surpluses.
UR - http://www.scopus.com/inward/record.url?scp=85038578537&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85038578537&partnerID=8YFLogxK
U2 - 10.1093/epolic/eix010
DO - 10.1093/epolic/eix010
M3 - Article
AN - SCOPUS:85038578537
SN - 0266-4658
VL - 32
SP - 415
EP - 446
JO - Economic Policy
JF - Economic Policy
IS - 91
ER -