The political market for immigration restrictions: Model and test

Abstract

A two-sector model of the destination economy is developed in order to determine the distributional effects of immigration. In one sector, native and immigrant workers are substitutes in production, while in the other they are complements. The two industries are assumed to draw immigrants from the same pool, whose size is exogenous to employers and set by politicians. A political market for an endogenous immigration quota arises as a consequence of the conflicting interests of the two native worker groups, as well as those of lobbying groups organized along non-labor market lines. A reduced form expression for the equilibrium quota is derived. The size of the quota is determined by the levels of product and labor demand in the two industries, lobbying costs of native workers, the degree of substitutability or complementarity in production between native and immigrant labor, the proportions in which the immigrant workforce is divided between the two industries, the wage elasticities of demand for native and immigrant labor, the influence of groups opposed to immigration on non-economic grounds, and the size of the immigrant population in the destination country. The model is tested using annual data on employment visas issued by U.S. authorities. It is found that political pressure for tighter immigration controls is dominant during periods of economic expansion, while technological progress, a growing immigrant community and a larger share of immigrants from Europe lead to looser immigration restrictions.J.E.L. classification codes: D72, F22, J61

Political economy of immigration policy in GCC countries

“…They address these issues by analyzing the impact of political organization by business lobbies and workers' associations on the structure of U.S. migration policy across sectors between 2001 and 2005. Their findings are consistent with the predictions of Bodvarsson et al (2007)'s theoretical model. They show that both promigration and antimigration interest groups play a statistically significant and economically relevant role in shaping migration across sectors.…”

“…This argument, however, is reversed in the case of lobbying substitutes. Bodvarsson et al (2007) analyze the determination of an equilibrium quota in a political market in which the income effects of immigration on native-owned factors, as well as the preferences of interest groups favoring or opposing immigration for noneconomic reasons, translate into political pressure on politicians. They find that the equilibrium migration policy depends critically on the degree of complementarity between different types of labor and capital.…”

An examination of the insulation of global worker communities for political reasons: the case of the J-1 Visa in the United States

“…One area that is especially subject to competing pressures from different constituencies, such as employers and workers, is immigration policy (Shughart et al ., 1986). As Bodvarsson et al . (2007, p. 161) note, the “formation of immigration policy is therefore driven fundamentally by the configuration of domestic interests in favor of, or opposed to, immigration flows to the destination country.”…”

A Theoretical Exposition of Migration Enforcement on Existing Migrant and Domestic Households*

“…The ongoing debate between Borjas et al (2008) and Ottaviano and Peri (2008) best illustrates the current economic research in this area. In that, there appears to be some agreement in the literature that if immigration has an economic (wage) effect on domestic households then it must also drive public preferences over immigration (Bodvarsson et al 2007; Scheve and Slaughter 2001). However, it is not clear whether such an effect exists (Ottaviano and Peri 2008; Longhi et al 2005; Friedberg and Hunt 1995).…”

“…The approach in this paper is slightly different from that of the previous theoretical exercises that evaluate the effects of immigration on domestic workers (Chao and Yu 2002; Kondoh 1999). This paper employs a political economy‐type analysis (in the spirit of Bodvarsson et al 2007) that allows domestic households to lobby government for stricter immigration enforcement. Domestic household dislike of new immigration flows drive the fraction of time devoted to lobbying.…”