Too Many Migrants, Too Few Services: A Model of Decision-Making on Immigration and Integration with Cultural Distance

23 Pages Posted: 6 Oct 2004

See all articles by Harrie A. A. Verbon

Harrie A. A. Verbon

Tilburg University - CentER; CESifo (Center for Economic Studies and Ifo Institute)

A. C. Meijdam

Tilburg University - Center for Economic Research (CentER); Tilburg University - Department of Economics

Date Written: September 2004

Abstract

In this paper we model the demand for immigrants as a trade-off native voters face between having services, produced by unskilled and non-assimilated 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. If they don't, they produce services. Assimilated immigrants take on skilled jobs. At the political level natives choose the number of immigrants that can be allowed, given some fixed price for services. We show that, at the assumed price, it is never optimal for natives to have equilibrium or unemployment in the service sector. Market forces then lead to higher service prices, implying that the initially allowed number of immigrants is too large.

JEL Classification: D72, F22

Suggested Citation

Verbon, Harrie A. A. and Meijdam, A.C. (Lex), Too Many Migrants, Too Few Services: A Model of Decision-Making on Immigration and Integration with Cultural Distance (September 2004). Available at SSRN: https://ssrn.com/abstract=601321

Harrie A. A. Verbon (Contact Author)

Tilburg University - CentER ( email )

Department of Economics
P.O. Box 90153
5000 LE Tilburg
Netherlands
+31 13 466 28 78 (Phone)
+31 13 466 30 42 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

A.C. (Lex) Meijdam

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 23 85 (Phone)
+31 13 466 30 42 (Fax)

Tilburg University - Department of Economics

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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