Immigration quotas and skill upgrading |
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| Institution: | 1. Eindhoven University of Technology, Innovation, Technology Entrepreneurship & Marketing Group, Den Dolech 2, PO Box 513, 5600 MB Eindhoven, The Netherlands;2. Erasmus School of Economics, Erasmus University Rotterdam, The Netherlands;3. IESE Business School Universidad de Navarra, Barcelona, Spain;1. Newcastle Business School, The University of Newcastle, Callaghan, NSW 2308, Australia;2. HEC Paris, Department of Marketing, 1 rue de la Libération, 78351 Jouy-en-Josas Cedex, France;1. Newcastle Business School, The University of Newcastle, Callaghan, NSW 2308, Australia;2. Faculty of the Professions, Business School, The University of Adelaide, 10 Pulteney Street, Adelaide, South Australia 5005, Australia;1. Bauer College of Business, University of Houston, Houston, TX 77204-6021, United States;2. Jones Graduate School of Business, Rice University, 6100 Main Street (MS 531), Houston, TX 77005, United States |
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| Abstract: | A reason why immigration policy is such a contended issue is that often immigrants end up obtaining the right to vote and, hence, may affect future policies. This paper offers a dynamic, general equilibrium model of immigration policy. In each period, a heterogeneously skilled population chooses an immigration policy by majority vote. Voters anticipate that immigration affects the skill premium and the skill composition of the electorate. The main insight is the existence of a trade-off between skill complementary immigration and the resulting shift in political power. I argue that a reasonably parameterized version of the model is consistent with the main features of US immigration. |
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