Political Economy of Immigration: Determinants of Preferences over Immigration

I present a theoretical model of preferences on immigration and trade policy. I show that, if the home country’s capital endowment is high, then free trade is supported by those individuals who would also support immigration, thereby increasing the labor supply in the economy. I empirically test the predictions of the model on the correlation of preferences in immigration and trade issues, focusing on the voting behavior of legislators of the 108th U.S. Congress. I find a significantly positive correlation between free-trade and pro-immigration attitudes, consistent with the theoretical prediction. However, other non-economic factors appear also very important in predicting immigration preferences. One standard deviation in a legislator’s social conservativeness index has a larger effect than one standard deviation in the legislator’s trade index. This effect is quite plausible if one considers that immigrants eventually become citizens and voters.


Competing for Good Immigrants

I develop a theoretical model of competition for immigrants between different countries. I assume that there are “desirable” and “undesirable” potential immigrants. In my model, countries simultaneously choose both an immigration quota and a level of “scrutiny” that would-be immigrants face, and then immigrants choose to which countries to apply. I analyze the subgame-perfect equilibrium of this model and derive policy implications.


Dynamic Lobbying Conflicts

Published together with M. Polborn in Economics of Governance,  May 2007, Volume 8, Issue 3, pp 263-279

This paper analyzes a dynamic lobbying model in which two antagonistic lobbies compete with each other for a prize over two time periods that are linked through status quo bias. The attacker has to decide whether to attempt an attack on the status quo already in the first period or whether to wait. We identify how the attacker’s behavior in the dynamic model differs from that in a comparable static model. Two antagonistic effects are the “option value effect” that is similar to the real option effect in the theory of investment decisions under uncertainty; and a “defender discouragement effect” that often makes change cheaper to achieve than in a comparable static model.