Abstract:Barriers and border patrols complement amnesty in a coherent policy that creates incentives for illegal immigrants to self-select on the basis of ability in a way that benefits a rich host country. We consider the roles of barriers to migration and immigration amnesties in greater depth and, in particular, we examine the rich country's optimal policies. Encouraging self-selection is optimal under some, but not all, circumstances, because there are mixes of potential immigrants for which the cost of welfare migration is more than offset by the gains from productive workers enticed by a more lenient immigration policy. Furthermore, under plausible assumptions, the rich country's optimum may require a probabilistic rather than a certain amnesty to fine-tune the mix of migrants. Numerical examples illustrate that probabilistic or certain amnesties, addressed to different partitions of the migrant population, are each optimal as the mix of potential migrants changes.
Document Type: Research Article
Affiliations: Department of Economics, Northern Illinois University, DeKalb, IL 60115, USA
Publication date: 2010-07-01