Social Capital, Trade and Optimal Migration Policy

34 Pages Posted: 14 Sep 1998

See all articles by Maurice Schiff

Maurice Schiff

Fellow, Institute for the Study of Labor (IZA)

Date Written: February 1996

Abstract

The movement of people differs from the movement of goods and services because people create attachments with those with whom they share social capital, including norms, language, customs, values and culture. South-North migration affects social capital in both places. Four types of externalities associated with migration are identified. The paper examines the impact of free migration and of immigration policy under alternative assumptions about internalization of these externalities. The effects of trade policy, illegal migration and changes in migration costs are also analyzed. Irrespective of the degree of internalization of these externalities, two unambiguous results are that the North gains from immigration controls and the South gains from trade liberalization.

JEL Classification: F11, F13, F22, J61

Suggested Citation

Schiff, Maurice W., Social Capital, Trade and Optimal Migration Policy (February 1996). Available at SSRN: https://ssrn.com/abstract=127068 or http://dx.doi.org/10.2139/ssrn.127068

Maurice W. Schiff (Contact Author)

Fellow, Institute for the Study of Labor (IZA) ( email )

Bonn
Germany

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