Can International Migration Ever Be Made a Pareto Improvement?
University of Tuebingen - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)
Gabriel J. Felbermayr
University of Stuttgart-Hohenheim
February 1, 2009
We argue that compensating losers is more difficult for immigration than for trade and capital movements. While a tax-cum-subsidy mechanism allows the government to turn the gains from trade into a Pareto improvement, the same is not true for the so-called immigration surplus, if the redistributive mechanism is not allowed to discriminate against migrants. We discuss policy conclusions to be drawn from this fundamental asymmetry between migration and other forms of globalization.
Number of Pages in PDF File: 25
Keywords: Migration Surplus, Redistribution, Pareto Improvement
JEL Classification: F22, H21
Date posted: August 12, 2009