Optimal Immigration Policy: When the Public Good is Rival

Stefano Bosi (), Eleni Iliopulos and Hubert Jayet
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Stefano Bosi: THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: In this model, we characterize optimal immigration and fiscal policies in the presence of a rival public good and heterogeneous discounting. Surprisingly, even if the government is benevolent towards natives only, it is optimal to keep borders open. Indeed, in the long run, patient natives hold the whole stock of capital, while impatient immigrants work. Moreover, since capital intensity is stationary, capital per native, consumption and the public good increase with the number of (immigrant) workers. This positive effect offsets the disutility deriving from the congestion of the public good. However, when we account for the costs associated with cultural heterogeneity, we find that it is optimal to regulate immigration inflows. We also analyze the long-run sensitivity of the optimal policy mix with respect to the fundamentals.

Keywords: immigration (search for similar items in EconPapers)
Date: 2011-12
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Published in Japanese Economic Review, 2011, 62 (4), pp.460-484. ⟨10.1111/j.1468-5876.2011.00535.x⟩

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Related works:
Journal Article: OPTIMAL IMMIGRATION POLICY: WHEN THE PUBLIC GOOD IS RIVAL (2011)
Working Paper: Optimal Immigration Policy: When the Public Good is Rival (2011)
Working Paper: Optimal Immigration Policy: When the Public Good is Rival (2011)
Working Paper: Optimal Immigration Policy When the Public Good Is Rival (2010)
Working Paper: Optimal Immigration Policy When the Public Good Is Rival (2010)
Working Paper: Optimal immigration policy when the public good is rival (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:hal-00628757

DOI: 10.1111/j.1468-5876.2011.00535.x

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