What is the optimal immigration policy? Migration, jobs, and welfare

We study the immigration policy that maximizes the welfare of the native population in an economy where the government designs an optimal redistributive welfare system and supplies public goods. We show that when the government can design different tax systems for immigrants and natives, free immigration is optimal. It is also optimal to use the tax system to encourage the immigration of high-skill workers and discourage that of low-skill workers. When immigrants and natives must be treated alike, banning low-skill immigration and allowing free immigration for high-skill workers is optimal. However, there might be no high-skill immigration when heavy taxes are levied on all high-skill workers, both natives and immigrants.

• Publication year

  2019

• Venue

  Journal of Monetary Economics

• Publication date

  2019-08-01

• Fields of study

  Economics, Political Science

• Identifiers
  DOI 10.1016/J.JMONECO.2020.04.009
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

• Integrated Public Use Microdata Series

  2021cited by this paper
• The National Academies of Sciences, Engineering and Medicine

  2020cited by this paper
• The Heterogeneous Effects of Government Spending: It’s All About Taxes

  2018cited by this paper
• Immigration and Redistribution

  2018cited by this paper
• Nonlinear Effects of Taxation on Growth

  2017cited by this paper
• Tradability and the Labor-Market Impact of Immigration: Theory and Evidence from the U.S.

  2017cited by this paper
• Mirrlees Meets Diamond-Mirrlees

  2016cited by this paper
• The Economic and Fiscal Consequences of Immigration

  2016cited by this paper
• Optimal Tax Progressivity: An Analytical Framework

  2014cited by this paper
• Latin America and the Caribbean as tailwinds recede : in search of higher growth

  2013cited by this paper
• The Impact Of Immigration On The Structure Of Wages: Theory And Evidence From Britain

  2012cited by this paper
• RETHINKING THE EFFECT OF IMMIGRATION ON WAGES

  2012cited by this paper
• Are Micro and Macro Labor Supply Elasticities Consistent? A Review of Evidence on the Intensive and Extensive Margins

  2011cited by this paper
• Skills, Tasks and Technologies: Implications for Employment and Earnings. NBER Working Paper No. 16082.

  2010influential reference
• The New Dynamic Public Finance

  2010influential reference
• Immigration and Inequality

  2009influential reference
• Uncommon Sense: Economic Insights, from Marriage to Terrorism

  2009cited by this paper
• Measuring factor income shares at the sectoral level

  2008influential reference
• The Effect of Low‐Skilled Immigration on U.S. Prices: Evidence from CPI Data

  2008cited by this paper
• Optimal Fiscal Policy with Redistribution

  2007cited by this paper
• What Is America

  2007cited by this paper
• The Impact of Immigration on the Structure of Male Wages: Theory and Evidence from Britain

  2006cited by this paper
• A New Method of Estimating Risk Aversion

  2006influential reference
• Is the New Immigration Really so Bad?

  2005cited by this paper
• Capital-Skill Complementarity and Inequality : A Macroeconomic

  2004cited by this paper
• Unequal Societies: Income Distribution and the Social Contract

  2000cited by this paper
• Re-examination of uniform commodity taxes under a non-linear income tax system and its implication for production efficiency

  1999cited by this paper
• Computing Inequality: Have Computers Changed the Labor Market?

  1998cited by this paper
• Regional labor markets and the determinants of wage inequality

  1994cited by this paper
• The Economics of Immigration

  1994cited by this paper
• The Economic Benefits from Immigration

  1994influential reference
• On the Labor Market Effects of Immigration and Trade

  1991cited by this paper
• Balanced-budget redistribution as the outcome of political competition

  1987cited by this paper
• The Substitutability of Natives and Immigrants in Production

  1982cited by this paper
• Migration and optimal income taxes.

  1982cited by this paper
• Aggregate Land Rents, Expenditure on Public Goods, and Optimal City Size

  1979cited by this paper
• The design of tax structure: Direct versus indirect taxation

  1976influential reference
• Optimal Taxation and Public Production I: Production Efficiency, II: Tax Rules

  1971cited by this paper
• An Exploration in the Theory of Optimum Income Taxation

  1971influential reference
• Is this America

  1935cited by this paper
• Federal Reserve Bank of Minneapolis Research Department Staa Report # 236 Capital-skill Complementarity and Inequality: a Macroeconomic Analysis

  year unknowncited by this paper
• Federal Reserve Bank of Minneapolis Research Department Staff Report 293 Optimal Indirect and Capital Taxation

  year unknowncited by this paper

• Optimal Taxation of Capital in the Presence of Declining Labor Share

  2025cites this paper
• Dynamic Model of Demand-Supply of Labor and its Optimal Management with Immigration Policy

  2025cites this paper
• The Great Divide: Environmental Migration as a Response to Climate Change and Policy in North and South

  2025cites this paper
• On the Design of an Optimal Immigration Policy

  2024cites this paper
• The influence of cultural ties on China's population flow networks

  2024cites this paper
• Nonlinear Taxation and International Mobility in General Equilibrium

  2023influential citation
• Perceptions of the socioeconomic effects of Venezuelan migration among informal traders in Cartagena de Indias (Colombia)

  2023cites this paper
• Algoritmo no supervisado para clasificar niveles de riesgo de inmigración

  2023cites this paper
• The interdependencies between the private and public sectors in open economies

  2023cites this paper
• Remote Work, Foreign Residents, and the Future of Global Cities

  2023cites this paper
• The effects of admittingi Immigrants: a look at Japan’s school and pension systems

  2022cites this paper
• The deadly effects of losing health insurance

  2021cites this paper
• Immigration and Redistribution

  2020cites this paper
• Should Germany have built a new wall? Macroeconomic lessons from the 2015-18 refugee wave

  2020cites this paper
• International Migration Unions

  2020cites this paper
• Optimal Fiscal Policy in the Presence of Declining Labor Share∗

  2020cites this paper
• Migration and sovereign default risk

  2020cites this paper
• The Economic Benefits from Immigration

  1994cites this paper