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A political economic analysis of labor migration and income redistribution

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Abstract

We present a two-country political economic model of income redistribution with internationally mobile labor. Migration can be exogenous and/or endogenous (i.e., determined by labor income differentials). Political influence is determined by the size and homogeneity of the groups, where the latter can be affected by immigration. We show that immigration can increase the transfers to, and the income of, the mobile group. We also investigate the possibility of migration regulation, tax-transfer policy competition and coordination and, finally, coordination of regulation policies. It is shown that the selection of any of those regimes will depend on the particular distribution of political influence among the relevant social groups in the two countries.

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Authors and Affiliations

  1. CREED and Tinbergen Institute, University of Amsterdam, Roetersstraat 11, 1018 WD, Amsterdam, The Netherlands

    Isidoro Mazza & Frans Van Winden

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  1. Isidoro Mazza
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  2. Frans Van Winden
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Additional information

For helpful comments on previous drafts the authors thank Bruno Frey, Robert Inman, Eckhard Janeba, Dennis Mueller, Jan Potters, Friedrich Schneider, Randolph Sloof, the participants in the meetings of the European Public Choice Society, Portrush 1993, the Econometric Society, Uppsala 1993, the Public Choice Society, Austin 1994, and two anonymous referees.

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Mazza, I., Van Winden, F. A political economic analysis of labor migration and income redistribution. Public Choice 88, 333–363 (1996). https://doi.org/10.1007/BF00153237

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