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Title: On the Self-Selection of Immigrants

Citation Type: Miscellaneous

Publication Year: 1998

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Abstract: Immigrants from dierent countries of origin perform dierently in theUS labor market. I show that two variables are related to these dierences:(i) the distance of the country of origin from the US, and (ii) the culturalbackground, in particular the language spoken in the country of origin. Thispaper analyzes the migration decision in a general equilibrium framework,in which agents care about the welfare of their children and dier in wealthand ability. Old agents from the poor country have the option of sendingtheir children to the rich country, but this decision is costly: immigrantspay a xed cost and suer a temporary loss of ability. I nd that thepattern of self-selection of immigrants in terms of ability depends on therelative weight of those costs. Under a reasonable parametrization, themodel broadly reproduces the dierences in earning proles of immigrantsobserved in the US data. The model has also interesting implications interms of immigration policy. Replacing the existing quota system by anentry fee is an eective policy to limit the number of immigrants and toincrease their average ability, generating at the same time some revenue. Ishow the existence of an optimal entry fee, bigger than zero, that maximizesaggregate welfare in the host country. Perhaps surprisingly, this optimal policy may imply an increase in the number of immigrants.

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Authors: Urrutia, Carlos

Publisher: Universidad Carlos III de Madrid

Data Collections: IPUMS USA

Topics: Migration and Immigration

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