Redistribution as a local public good subject to congestion.
Economia Mexicana › Vol. 17 Nbr. 1, January 2008
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Redistribution as a local public good subject to congestion.
Introduction
As surveyed in Borjas (2002), important US policy measures regarding immigration have been inspired by the concerns that migrants can become public charges, as well as to avoid the US public welfare to become an immigration magnet (consider, for instance, the 1891 US Congress legislation concerning entry of persons likely to become public charges, or even the 1994 Proposition 187 in California). In a more theoretical framework,Wildasin (1994) shows how income redistribution policies by a host country distort migration decisions, and may make all inhabitants of the host country worse off when freeing migration. (See Myers and Papageorgiou, 2000; Razin and Sadka, 1995; Wellisch and Wildasin, 1996;Wellisch and Walz 1998; and also Wildasin, 1998; for related topics.) Also, Brecher and Choudhri (1990) discuss the problems of using a redistribution mechanism based on indirect taxation (as the mechanism that Dixit and Norman, 1980, use for proving gains from trade) (1) in order to attain a Pareto gain from freeing factor markets. These two papers take a host country point of view. In this paper we analyze the policies needed in order to achieve Pareto gains from freeing international migration, when countries are using income redistribution policies. In order to achieve a deeper understanding of the problems, and also consider the origin country point of view, I base my presenta...See the full content of this document
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