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Too many migrants, too few services: a model of decision-making on immigration and integration with cultural distance

Abstract

We model the political demand for immigrants as a trade-off that native voters face between having services, assumed to be produced only by unskilled and nonassimilated immigrants, and experiencing disutility due to the immigrant workers having a culture different from the native culture. Immigrants decide whether to integrate into the native culture. We show that if services are priced according to per unit costs, the market demand for immigrants will exceed the political demand. Market forces then lead to higher services prices, implying that the initially allowed number of immigrants is ‘politically’ too large.

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Fig. 1

Notes

  1. The next quote from Zimmermann (2005) emphasizes this relationship. Discussing integration of immigrants in Europe, he notes: “Labour market disadvantages seem not to reflect discrimination, but the slow assimilation process whereby immigrants can only improve their labour market status with length of residence.” Our assumption that assimilation immediately implies that immigrants become identical to native workers is, admittedly, rather strong. As one of our referees rightly remarked, the conversion of unskilled immigrants to skilled workers will take place with a time lag. Our results would not change, however, if we had assumed that the adaptation to the native workers’ skills is the outcome of a gradual process. Another issue in this respect is that natives might prevent immigrants from assimilating. See Epstein and Gang (2004) on that.

  2. Modeling the demand for immigration as a result of utility maximization has obtained some popularity in the public-choice oriented literature. For example, Benhabib (1996) derives the demand for immigrants as a function of the immigrants’ wealth compared to the wealth of the median voter. In Haupt and Peters (1998), natives demand immigrants in order to get lower social-security taxes or higher social-security benefits.

  3. The non-loglinear specification of the cultural aspect is motivated by mathematical simplicity. Notice though the similarity of this specification with the so-called attachment-to-home models proposed by Mansoorian and Myers (1993). We specify the cultural effect as a function of U. An obvious alternative would have been to link assimilation to the relative number of non-assimilated immigrants, e.g., U/N. This specification leaves all our results unaffected, however.

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Acknowledgments

This paper has benefited from the comments of two anonymous referees and of the participants of the Center for Economic Studies/Ifo Conference on Migration and the Welfare State held in Munich on November 7–8, 2003.

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Correspondence to Harrie A. A. Verbon.

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Responsible editor Klaus F. Zimmermann

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Verbon, H.A.A., Meijdam, L. Too many migrants, too few services: a model of decision-making on immigration and integration with cultural distance. J Popul Econ 21, 665–677 (2008). https://doi.org/10.1007/s00148-006-0108-5

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  • DOI: https://doi.org/10.1007/s00148-006-0108-5

Keywords

  • Immigration policy
  • Assimilation

JEL Classification

  • F22
  • J61