Immigration Policy and Counterterrorism
Federal Reserve Bank of St. Louis Working Paper No. 2011-012B
44 Pages Posted: 29 Apr 2011 Last revised: 15 Jun 2012
Date Written: February 2012
A terrorist group, based in a developing (host) country, draws unskilled and skilled labor from the productive sector to conduct attacks in that nation and abroad. The host nation chooses proactive countermeasures. Moreover, a targeted developed nation decides its optimal mix of immigration quotas and defensive counterterrorism actions. Even though proactive measures in the host country may not curb terrorism directed at it, it may still be advantageous in terms of national income. Increases in the unskilled immigration quota augment terrorism against the developed country. By contrast, increases in the skilled immigration quota can reduce terrorism in the developed country if skilled migrants have a small marginal impact on terrorism there. When the developed country assumes a leadership role, it strategically should reduce its skilled immigration quota to induce more proactive measures in the host developing country.
Keywords: Transnational terrorism, immigration, counterterrorism policy, developing country, externalities
JEL Classification: F22, O10, D74
Suggested Citation: Suggested Citation