Immigration as a Commitment Device

No 614, Discussion Papers from Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre

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.

JEL-codes: D72 F22 J68 (search for similar items in EconPapers)
Date: 2004
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https://madoc.bib.uni-mannheim.de/997/1/614.pdf

Related works:
Journal Article: Immigration as a commitment device (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:mnh:vpaper:997

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