Does coordination of immigration policies among destination countries increase immigration?

Abstract

We set up a theoretical model to analyze the implications of coordination of immigration policies among destination countries. The model contains two types of spillovers between destination countries: a terms-of-trade externality and a welfare-policy externality. We show that while coordination unambiguously increases welfare of the destination countries, the effects on the level of immigration and on the income distribution of natives are ambiguous. Thus, coordination among destination countries does not necessarily solve the global coordination problem of inoptimally low levels of migration.coordination, externalities, immigration policy, spillovers, terms of trade, welfare,