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Tradable Immigration Quotas

37 Pages Posted: 20 Jun 2011  

Jesús Fernández-Huertas Moraga

Universidad Carlos III de Madrid; Instituto de Análisis Económic (IAE) Barcelona

Hillel Rapoport

Bar-Ilan University - Department of Economics; Stanford University

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International migration is maybe the single most effective way to alleviate poverty at a global level. When a given host country allows more immigrants in, this creates costs and benefits for that particular country as well as a positive externality for all those (individuals and governments) who care about world poverty. This implies that the existing international migration regime is inefficient as it fails to internalize such externality. In addition, host countries quite often restrict immigration due to its apparently unbearable social and political costs. However these costs are never measured and made comparable across countries. In this paper we first discuss theoretically how tradable immigration quotas (TIQs) can reveal information on such costs and, once coupled with a matching mechanism taking into account migrants’ preferences, generate substantial welfare gains for all the parties involved. We then propose two potential applications: a market for the resettlement of international (e.g., climate change) refugees, and an extension of the US diversity lottery to a larger set of host countries and other immigration targets. Both applications are seen as possible precursors to a full implementation of a TIQs system.

Keywords: immigration, immigration policy, tradable quotas, refugees, climate change, international public goods

JEL Classification: F22, F5, H87, I3, K33, 019

Suggested Citation

Moraga, Jesús Fernández-Huertas and Rapoport, Hillel, Tradable Immigration Quotas. IZA Discussion Paper No. 5765. Available at SSRN:

Jesús Fernández-Huertas Moraga (Contact Author)

Universidad Carlos III de Madrid ( email )

CL. de Madrid 126
Madrid, Madrid 28903

Instituto de Análisis Económic (IAE) Barcelona

Barcelona, Bellaterra 08193

Hillel Rapoport

Bar-Ilan University - Department of Economics ( email )

Ramat-Gan, 52900
+972 3 535 3180 (Fax)

Stanford University ( email )

Stanford, CA 94305
United States

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